Increased use in Hong Kong, the UAE and other markets highlights the growth of Stablecoins’ global footprint.
According to a new report from Citi’s Global Perspectives & Solutions (GPS) unit, Stablecoins projected that by 2030, it could reach $1.9 trillion by 2030, and could reach up to $4 trillion in a bullish scenario.
That’s higher than City’s previous forecasts of $1.6 trillion and $3.7 trillion respectively. Currently, Stablecoins’ market capitalization is $29.579 billion, an increase of 42% since January.
Banks also predict that by 2030, Stubcoin will be able to process approximately $100 trillion in payments of $200 trillion in the highest case scenario. Meanwhile, bank tokens like tokenized deposits can process between $100 and $140 trillion per year.
Banks stressed that these numbers “may look big for amateurs,” but are relatively small compared to major banks that are currently moving between $5 trillion and $10 trillion per day.
“We can see ecosystems where stable coins, tokenized sediments, sedimentary tokens and CBDCs all thrive and coexist,” the report said. “The different forms of money fit into the various product markets that come with use shaped by trust, interoperability and regulatory clarity.”
Citi has identified the key drivers behind growth and forecasts as new corporate initiatives, regulatory clarity (including the recently passed Stablecoin-focused genius law), and identified increased demand from digital native companies.
Growth in the global footprint
The report also finds that on-chain volumes are expected to maintain a large US dollar denomination, which is expected to create additional demand for the US Treasury. However, City emphasized that hubs such as Hong Kong and the UAE are also driving growth.
However, as stubcoins and tokenized deposits grow, traditional banks will need to coordinate their services, but regulators may face pressure to clarify digital money rules, the report says. This shift could change payments, liquidity, and cross-border finance over the next few years.
These changes can have ripple effects, especially as the stupid and stupidity of dollar support becomes prominent. Regional prices in emerging and developing markets, for example, could be more sensitive to US monetary policy, “which will degrade the central bank’s ability to manage domestic inflation,” the report states.
The report also said efforts to defend local currency against rising demand for dollar-backed stable forms could “stress FX reserves and increase macroeconomic vulnerability.”
Citigroup Inc. is the third largest US bank with a total integrated assets of approximately $1.7 trillion. Earlier this year, the banks were exploring plans to launch their own Stablecoin, breaking news that they were joining an increasing list of major banks and institutions expanding into the crypto space.
Currently, Tether is the publisher of USDT, the world’s largest Stablecoin, and has ordered a market share of over $173 billion per Defillama.