2025 would be blockchain’s ChatGPT moment, and stablecoins would be leading the charge – this is according to two reports by Citi, one published in April this year and one more recently. But despite proclaiming the potential dominance of stablecoins, Citi cautions that the digital currency is “not the answer to everything”. Some other forms of money have worked very well and will continue to serve different needs.
The speed of transformation within the crypto space – as evidenced by cryptocurrency company listings, fundraising, and digitally native companies bringing stablecoins to real-world activities – has prompted Citi to revise its forecast for stablecoin issuance. By 2030, citi predicts that base case, total stablecoin issuance will be US$1.9 trillion, up from its previous estimate of US$1.6 trillion. Bull case, issuance is expected to hit US$4 trillion, up from US$3.7 trillion.
Despite these numbers, crypto is not likely to “burn down the existing system”, writes Citi, and stablecoins are “not the answer to everything”. The report points out, “Domestic consumer payments in many countries work well; they are already real-time, 24×7, and low-cost.” It acknowledges that cross-border payments are “a different matter”, but fintechs and banks are making progress in that segment, too.
The report concludes, “Stablecoins may be a vital addition to the finance toolkit, especially for digitally native companies and investors, as well as frontier market households looking for an easy way to hold dollars. But for many, bank tokens – deposit tokens, tokenised deposits and similar – will be an easier integration… It is not a digital format war that we foresee. But a continued progress towards smarter, faster finance.”
