Stablecoins to hit $1.9T as trust surpasses fees in exchanges

A Citi (NASDAQ: C) report has predicted that the stablecoin market will achieve a $1.9 trillion valuation by the end of the decade in its base case scenario, while leaving room for an additional growth spurt.

• Stablecoins to reach a $1.9 trillion valuation by 2030
• Challenges hindering stablecoin adoption
• Digital asset exchange users value trust over low fees
• Competition among digital asset exchanges

Citi analysts disclosed that stablecoins are the “ChatGPT moment” for the institutional adoption of blockchain. Akin to the rise of artificial intelligence (AI) chatbots, the report tips stablecoins to record a high growth in valuation in the coming years.

While Citi analysts have forecasted a $1.9 trillion base case for the asset class, the report predicted that stablecoins can climb to $4 trillion by the end of 2030 in its bull case scenario. The global stablecoin market capitalization sits at $307 billion, rising from $200 billion at the start of 2025.

Citi is pinning its prediction on the 58% growth notched by stablecoins in 2025 alone, with analysts forecasting that the trend will continue until the end of the decade. Apart from a strong 2025, Citi analysts have highlighted a streak of stablecoin project announcements in the ecosystem.

Early in the year, Trump-backed World Liberty Financial (WLF) threw its hat into the stablecoin race with the launch of USD1, with a raft of U.S.-based financial institutions planning their stablecoin rollouts. Citi noted that the flurry of announcements stemmed from fresh regulatory support in the U.S., which was highlighted by the signing of the GENIUS Act by U.S. President Donald Trump.

While use cases have surged from domestic and cross-border payments, Citi notes that the stablecoin boom will not completely overhaul the financial system. However, analysts refer to the innovation as “continued progress” toward smarter finance.

“We don’t believe crypto will burn down the existing system,” read the Citi report. “Rather it is helping us reimagine it.”

Citi disclosed that domestic payments are already capable of processing payments in real-time and at low cost, providing competition to stablecoins. While cross-border payments appear to be the primary use case, the report noted that fintech firms and traditional financial institutions are making significant progress to reduce settlement times and fees.

A streak of challenges for stablecoins

Despite the positive numbers for stablecoins, Citi’s forecast also looks at the challenges in the sector. Firstly, regulatory uncertainty for stablecoins remains outside the U.S., leading to hiccups in global adoption metrics.

For several stablecoin issuers, the question of reserves remains a lingering concern, while others face allegations of market manipulation. Several high-profile stablecoin collapses, such as TerraUSD (UST), have sparked concerns over collateral transparency, prompting authorities to tighten regulations.

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