Latest news with #CitiInstitute
CNBC
6 days ago
- Business
- CNBC
Wall Street's next trillion dollar market could grow 10 times by 2030, analysts say
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.
Yahoo
13-05-2025
- Business
- Yahoo
Stablecoins Will Expand Beyond Crypto Trading, Become Part of Mainstream Economy, Citi Predicts
The stablecoin market could soon eclipse the entire crypto trading ecosystem that gave birth to it as regulatory tailwinds allow for the integration of the fixed-value tokens into the mainstream economy, according to predictions from global bank Citi. Above and beyond their role as tokenized cash for the crypto trading community, stablecoins — digital tokens whose value is pegged primarily to the U.S. dollar — are already expanding into payments and remittances. The next five years will likely see them replacing some overseas and domestic U.S. currency holdings as well as forming part of the short-term liquidity held at banks, according to a recent report from Citi Institute's Future Finance think-tank. If yield-bearing stablecoins can be issued, those may find a role in term deposits and retail money market funds. 'We're looking at the integration of stablecoins into what you call the mainstream economy,' Ronit Ghose, the global head of Future of Finance, Citi Institute, said in an interview. 'For example, stablecoins could be the cash leg for tokenized financial assets, or for payments by SMEs and large corporates. The dollar, and to a lesser extent the euro, has this kind of international currency status. Stablecoins allow people all over the world to hold dollars or euros in an easy, low cost way.' The stablecoin market size is currently around $240 billion, led by Tether's $145 billion USDT and Circle's $60 billion USDC. In Citi's base-case prediction, stablecoins will grow to $1.6 trillion by 2030, provided regulatory support and institutional integration take hold. In the bank's more bullish scenario, the market could balloon to $3.7 trillion. (The global cryptocurrency market cap today stands around $3.45 trillion.) Large crypto firms like Fireblocks, a platform for managing and moving crypto assets, said it's also noted a swing in stablecoin use away from a settlement and on/off ramp trading tool toward payments. 'Payment companies are leveraging stablecoins for a variety of pure-play payment flows, including cross-border transfer, remittance, merchant settlements and others,' CEO Michael Shaulov said in an email. 'Payment companies represent 11% of all of our clients, but 16% of the overall stablecoin transactions with over 30% growth of Q/Q in volumes. It is likely that this growth will continue, and they will represent 50% of the stablecoin volume within 12 months.' Over the past 90 days, the combined USDT and USDC volume on Fireblocks was $517 billion, some 44% of the total volume, a figure that has doubled over the past several years. Of that, payment companies generated $82 billion, up 38.2% quarter over quarter, Fireblocks said. The Empire Strikes Back In the past, Citi's Future Finance team has weighed the potential of central bank digital currencies (CBDCs), often seen as the antithesis of freewheeling libertarian innovation by the crypto community, a view also held by President Donald Trump. For Citi's Ghose, the growth of stablecoins raises many questions: If the U.S. supports stablecoins, will Europe too? Or will Europe prefer CBDCs? Will CBDCs grow in the rest of the world? How will deposit tokens and tokenized deposits play out? Whatever the landscape looks like, banks will likely avail themselves of all of the above, Ghose said. All banks, by definition, conduct inter-bank payments, which make sense with a wholesale CBDC, as well as retail CBDCs, he said. 'Depending on the country, there may be a stablecoin option or there may be a CBDC option,' Ghose said. 'From a crypto perspective, it's like Starwars, where the CBDCs are the evil Empire, as opposed to the crypto guys, who see themselves as Luke Skywalker.'Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
