JPMorgan analysts have poured cold water on the recent hype surrounding the stablecoin market, calling the $2 trillion valuation forecast “hard to believe.” In a client note dated July 23, the banking giant expressed scepticism about the sector’s ability to scale at the pace suggested by some industry leaders and government officials.
The cautious stance comes just weeks after US Treasury Secretary Scott Bessent projected that the stablecoin market could cross the $2 trillion mark within the next three years. However, JPMorgan argues that such optimism overlooks the current limitations of the ecosystem.
Stablecoin Infrastructure Still in Infancy
“The infrastructure/ecosystem that supports stablecoins is far from developed and will take time to build out,” JPMorgan strategists stated in their note. While the bank acknowledges that stablecoin adoption is growing, it suggests a more realistic scenario would be the market doubling or tripling from its current size, rather than growing eightfold in the near term.
Ripple CEO Brad Garlinghouse
As of now, the global stablecoin market is valued at approximately $250 billion, according to Ripple CEO Brad Garlinghouse. This figure represents a sharp increase from prior years, but JPMorgan believes further expansion will be more gradual due to existing technological and regulatory hurdles.
One significant limitation, the bank noted in an earlier note, is that stablecoins are still used predominantly within the crypto ecosystem, not in mainstream transactions. “So far, stablecoin usage remains heavily concentrated within the crypto ecosystem, rather than as a tool for everyday payments,” the note stated.
Industry Leaders Still Bullish
Despite JPMorgan’s conservative outlook, other major players remain optimistic. Ripple’s Garlinghouse, speaking on CNBC’s Squawk Box, said he believes stablecoins could grow to $1 trillion or even $2 trillion in the next few years. He described the growth trajectory as “profound,” citing increased institutional interest and regulatory clarity as key drivers.
Bernstein, a global wealth management firm, issued a similarly bullish projection in 2023, forecasting that stablecoin issuance could rise over 2,000%, from roughly $125 billion in mid-2023 to as much as $2.8 trillion by 2028. Standard Chartered echoed this sentiment, estimating the market could reach $2 trillion by the end of 2028.
Western Union and the Real-World Utility Gap
Adding to the debate, Western Union CEO Devin McGranahan highlighted the current lack of real-world use cases for stablecoins. “Last I checked, you couldn’t spend Stablecoin if you wanted to buy a Coca-Cola,” he said in a recent interview with Bloomberg TV.
Western Union CEO Devin McGranahan
McGranahan suggested this gap presents an opportunity for traditional financial firms like Western Union to create bridges between stablecoins and fiat currencies, offering services that convert digital assets into spendable cash.
The comment underscores a key challenge for the stablecoin sector: while it holds promise for cross-border payments and DeFi applications, everyday usage remains limited due to merchant adoption, regulatory uncertainty, and lack of consumer-facing infrastructure.
JPMorgan’s Quiet Moves in the Stablecoin Space
Interestingly, JPMorgan’s scepticism hasn’t stopped it from making subtle moves in the stablecoin space. On June 15, the bank filed its second trademark application under the name “JPMD.” While the filing doesn’t specifically mention stablecoins, it references blockchain-based services such as digital asset clearing, virtual currency exchanges, and payment processing using distributed ledger technology (DLT).
The move aligns with recent reports suggesting that JPMorgan and other major banks are exploring a joint stablecoin initiative, possibly aimed at streamlining institutional settlement systems.
This dual approach, public caution combined with private development, reflects JPMorgan’s strategic positioning. The bank appears wary of overhyping stablecoins but recognises their long-term potential, especially in areas where traditional finance can integrate blockchain technology.
Slow But Steady Growth Ahead?
While JPMorgan’s stance might seem pessimistic to some, it serves as a reminder that meaningful innovation often requires time, infrastructure, and collaboration. The stablecoin market is undoubtedly evolving, but whether it can achieve $2 trillion in the next few years remains to be seen.
