JPMorgan: Stablecoin Usage Growth May Not Drive Market Cap Expansion

JPMorgan analysts led by managing director Nikolaos Panigirtzoglou said in a report that while stablecoin usage is growing rapidly, this may not translate to equivalent growth in total stablecoin market capitalization. The key factor is rising velocity—the frequency at which the same stablecoin is used in transactions—which has increased sharply over the past year, allowing the same amount of stablecoins to handle significantly more transactions.

"In our opinion, the more widely used stablecoin-based payment systems become, the higher their efficiency and thus their velocity," the analysts said. "In turn, higher velocity would likely limit the expansion of the stablecoin universe going forward, even if their usage in payments rises exponentially from here."

Stablecoin Market Growth and Transaction Volume

The stablecoin market cap has increased by nearly $100 billion over the past year, according to the JPMorgan analysts, with the total size exceeding $300 billion when including yield-bearing stablecoins. This growth has outpaced the overall crypto market cap, suggesting stablecoins are being used for purposes beyond trading or as collateral within crypto.

Onchain stablecoin transaction volume has grown significantly. The analysts estimate it is running at an annual pace of approximately $17.2 trillion this year based on year-to-date data. This growth accelerated following the passage of the GENIUS Act in the U.S., reflecting increasing use of stablecoins for payments.

Payment Types and Regional Distribution

While consumer-to-consumer payments still comprise the majority of activity, consumer-to-business and merchant payments are growing at faster rates, the analysts said, citing data from venture capital firm a16z crypto. Asia remains the dominant region for stablecoin usage.

JPMorgan's Prior Market Projections

This cautious outlook on stablecoin market expansion is consistent with JPMorgan's previous analysis. In December, the analysts projected the stablecoin market cap at approximately $500–$600 billion by 2028, stating they do not expect it to reach trillion-dollar levels. In May, they characterized other projections of a trillion-dollar stablecoin market as "far too optimistic."