Wall Street's next trillion dollar market could grow 10 times by 2030, analysts say

CNBC

4 days ago

The crypto market's stablecoin sector could grow by more than 10 times in the next five years, becoming the next trillion-dollar market opportunity, analysts say. The current market capitalization of stablecoins is around $225 billion, according to CryptoQuant, but Citizens JMP Securities forecasts that will grow to more than $3 trillion by 2030, Devin Ryan, head of financial technology research, said in a report last week. Citi Institute estimates the potential at a minumum of $1.6 trillion and as much as $3.7 trillion in the same time frame, analyst Alex Saunders said in a May 30 note. Wells Fargo said stablecoins are reaching "must-monitor levels." "Banks, fintechs, payment processors, big tech firms, and even central banks are entering what we view as a post regulatory 'land grab,'" Citizens JMP's Ryan said. "Even as interest rates 'normalize' off our $3 trillion estimate, we project a nearly $100 billion revenue opportunity for issuers, which for some will represent incremental fees while for others will be necessary to offset lower transaction fees." Cryptocurrencies that are pegged Stablecoins are cryptocurrencies whose values are pegged to that of another asset, usually the dollar. They are designed to bring the stability of traditional currencies to blockchain networks (praised for the speed and efficiency they provide for money transfers). USDT , issued by Tether, and USDC , issued by Circle, currently dominate the market. Traditionally used as bridge currencies for crypto traders, stablecoins today are benefiting from interest by banks and payment firms as the Trump administration rolls back restrictive Biden-era crypto policies and Congress makes progress on passing stablecoin legislation , possibly as early as August. In addition to the developments around U.S. regulation, dubbed the GENIUS Act, advances are also coming overseas, where MiCA regulation in Europe and frameworks in Singapore and elsewhere are adding to a global regulatory regime that will spur greater institutional adoption of stablecoins, Ryan said. Citigroup's Saunders said there's also a case to be made for stablecoins in addition to their uses in trading – as an "alternative store of value or a hedge against inflation and political volatility" – noting that stablecoin providers will increase the demand for Treasury Bills used to underpin the coins. The U.S. dollar's reserve currency status "is likely to be reflected in, rather than driven by, relative currency stablecoin issuance," Saunders said. Ryan highlighted stablecoins' utility in other transactions, including remittances, business-to-business payments, e-commerce, in tokenized financial markets and as a store of value in inflation-prone economies — all of which are likely to prove key drivers of growth. "Critically for the United States … we estimate the U.S. could see a multi-trillion structural bid for its debt — supporting liquidity and reinforcing monetary leadership," Ryan said. "Bigger picture, we view stablecoin adoption as a key gateway to broader tokenization of financial and non-financial assets, with blockchains positioned to serve as a foundational technology in an increasingly digital economy." —CNBC's Michael Bloom contributed reporting.