The stablecoin market is experiencing rapid growth, with issuance volumes climbing significantly from approximately $200 billion at the beginning of 2025 to an impressive $280 billion as reported by Citi this past Thursday. This remarkable surge has led the bank to adjust its predictions for the future, projecting a stablecoin issuance of $1.9 trillion by 2030 in a baseline scenario, and a potentially staggering $4 trillion in an optimistic outlook, an increase from previous estimates of $1.6 trillion and $3.7 trillion respectively.
According to Citi, if stablecoins were to circulate at rates similar to traditional fiat currencies, they could facilitate up to $100 trillion in annual transactions by the end of the decade under the base scenario, and even double that in its bullish prediction. This growth is being likened to a “ChatGPT moment” for blockchain technology, with digital-first companies driving the real-world adoption of stablecoins in commerce.
“This growth reflects blockchain’s ‘ChatGPT moment’ as digitally native companies lead adoption in real-world commerce,” the report states.
However, the report also indicates that stablecoins may not become the singular dominant force within on-chain finance. Instead, bank tokens, which include tokenized deposits, may garner greater transaction volumes driven by corporate demands for regulatory certainty, real-time settlements, and inherent compliance mechanisms. Citi suggests that even a modest shift of traditional banking operations to on-chain could see bank token turnover surpassing $100 trillion by the end of the decade.
Moreover, the forecast highlights the ongoing prominence of the U.S. dollar, as a majority of on-chain value remains dollar-denominated, further bolstering demand for U.S. Treasuries. Emerging financial hubs like Hong Kong and the UAE are also starting to explore their own innovative paths in this evolving landscape.
Ultimately, Citi views the rise of stablecoins not as a competition against traditional banks, but as part of a comprehensive re-envisioning of the financial system, with various forms of digital currency—spanning stablecoins, bank tokens, and CBDCs—coexisting and each carving out its unique role in the market.
The Expanding Landscape of Stablecoins
Key points regarding the growth of stablecoins and their implications:
- Rapid Expansion:
- Stablecoin issuance volumes rose from $200 billion at the start of 2025 to $280 billion.
- Citi’s forecast for 2030 stablecoin issuance has increased to $1.9 trillion (base case) and $4 trillion (bull case).
- Transaction Potential:
- If stablecoins achieve a circulation velocity similar to fiat, they could facilitate up to $100 trillion in annual transactions by 2030.
- The bull case scenario predicts this potential could double, implying vast economic activity.
- Emergence of Bank Tokens:
- Bank tokens, including tokenized deposits, might see higher transaction volumes fueled by corporate demand for regulatory compliance and real-time settlement.
- A small migration of traditional banking processes on-chain could push bank token turnover beyond $100 trillion by 2030.
- U.S. Dollar Dominance:
- Most on-chain transactions remain dollar-denominated, which supports ongoing demand for U.S. Treasuries.
- Emerging hubs of innovation like Hong Kong and the UAE indicate a shift toward diverse financial ecosystems.
- Coexistence of Digital Money:
- The rise of stablecoins represents a transformation in financial infrastructure rather than a direct challenge to traditional banks.
- Stablecoins, bank tokens, and Central Bank Digital Currencies (CBDCs) are expected to coexist, each serving specific financial needs.
The Expanding Landscape of Stablecoins: A Comparative Analysis
The stablecoin market is experiencing remarkable growth, with recent reports indicating a surge in issuance volumes. However, as this segment thrives, it faces competition from innovations within traditional banking frameworks, particularly with the rise of bank tokens. These alternatives, while benefiting from regulatory safeguards and facilitating real-time transactions, may challenge the stablecoin ecosystem in terms of user adoption and market share.
Competitive Advantages: The forecast for stablecoins is overwhelmingly positive, projecting an increase in transaction capabilities that could elevate them to the forefront of digital finance. Their potential to engage in massive transaction volumes—up to $100 trillion annually—positions stablecoins as an attractive option for businesses engaged in high-frequency transactions. Additionally, their inherent compatibility with blockchain technology offers flexibility and rapid settlement, appealing to digitally native organizations looking for efficient commerce solutions.
On the other hand, bank tokens present a compelling case for enterprises that prioritize compliance and security. The prospect of tokenized deposits, guided by clear regulatory frameworks, may entice larger corporations to adopt these digital assets, rendering stablecoins less appealing to more risk-averse sectors. This shift indicates that while stablecoins can dominate specific transactions, they might struggle to penetrate markets where regulatory assurance is a vital concern.
Beneficiaries and Challenges: The growth of stablecoins can significantly benefit small to medium enterprises (SMEs) and tech-savvy startups that wish to leverage digital assets for transactions. These entities stand to gain from lower transaction fees and faster processing times, enhancing their competitive edge in the market. However, the emerging trend of bank tokens could pose challenges for such businesses, especially those reliant on stable, traditional banking relationships that may now consider migrating to these innovative solutions.
Ultimately, the evolving landscape of stablecoins and bank tokens underscores a broader transformation in financial systems. While there may not be a direct battle for dominance between these digital currencies and traditional banking methods, the shift toward a dual infrastructure hints at the necessity for businesses to adapt their operational models to remain competitive in this fast-changing environment.
