Global Bank Citi predicts that 2025 could become a variable point of blockchain adoption driven by Stablecoins, similar to the breakout year (AI) that popular AI had in popular application ChatGPT.
“2025 could be a blockchain 'chat gupto' moment,” bank analysts said in a report released earlier this week.
At the heart of City's predictions are Stablecoins, a class of cryptocurrencies that are fixed in traditional currencies like the US dollar. Leading by Tether's $145 billion USDT and Circle's $60 billion USDC, these tokens have been growing significantly recently, and are increasingly being used for payments and remittances around the world.
Citi believes it could grow to $1.6 trillion by 2030 in a base case from the current $200 billion, due to warnings that regulatory support and institutional integration will take hold. In a more optimistic bank scenario, the market could swell to $3.7 trillion, but if the structural challenges continue to drag on, it could approach $500 billion in the bank bear case.
The main catalyst is the US's supportive regulatory stance, with a recent executive order directing the formation of a federal framework for digital assets, according to the report. Clarity about Stablecoin rules allows these tokens to be embedded deep into the financial system, providing faster payments, greater transparency and more efficient asset payments.
“This could lead to the adoption of blockchain-based money and promote financial and other non-existent use cases in the private and public sectors of the United States,” the author said.
Stablecoin Publishers become the leading US financial holder
It is expected that in the future, a large amount of dollars will maintain the sect. The report predicts that around 90% of the stubcoins in circulation in 2030 will still be tied to the US dollar, solidifying its advantage.
This has a major impact on the global financial system. Dollar Stablecoin issuers could be one of the US Treasury's biggest buyers, assuming regulations are being promoted to support tokens with low-risk, highly liquid traditional financial assets like government bonds. Citibank's estimated issuer could hold $1.2 trillion in US government debt by the end of the decade, potentially outweighing all major foreign sovereign holders.
Meanwhile, central banks in Europe and Asia will likely promote their own digital currency or CBDC, the report says.
The report pointed out several risks that could hinder growth. Stablecoins removed nearly 1,900 times in 2023 alone. This is written by the authors of the report, citing Moody data, including over 600 instances involving major tokens.
In extreme cases, mass redemption could, in turn, destroy crypto liquidity, force automated sales, and ripple through financial markets, as well as the consequence of the collapse of Silicon Valley Bank (SVB) hit by USDC.
