- Base-case estimate places supply at $1.6T; bullish at $3.7T.
- Active stablecoin wallets rose 53% year-on-year.
- Traditional banks lobby to restrict stablecoin issuers.
The global stablecoin market is on track for a seismic expansion, with Citigroup projecting the total market capitalisation to exceed $2 trillion by the end of this decade.
In a report published on Thursday, the banking group said stablecoins—digital tokens pegged to fiat currencies—could grow more than eightfold from today’s level of $240 billion, driven by regulation, institutional adoption, and rising demand in payments and DeFi.
Stablecoins are already used extensively for remittances, yield generation in decentralised lending platforms, and as a hedge against inflation in countries with volatile local currencies.
Their role in streamlining cross-border payments has also attracted interest from central banks and fintech firms.
Regulatory clarity key to growth past $1.6 trillion
Citigroup’s base-case scenario anticipates stablecoin supply reaching $1.6 trillion by 2030. A more bullish scenario pushes that figure to $3.7 trillion.
This growth will depend on the implementation of comprehensive regulations, particularly in the United States. Ongoing developments under President Trump’s administration have given new impetus to stablecoin-focused legislation.
Both chambers of Congress are currently examining proposals that could grant traditional institutions, such as Bank of America, the ability to issue stablecoins backed by US dollars.
The report emphasises that strong regulatory support would enhance trust in stablecoins and boost demand for US Treasuries, potentially positioning stablecoin issuers as major holders of government debt by 2030.
Tether, the current market leader, already holds tens of billions of dollars in Treasuries, according to its latest reserve disclosures.
Institutional demand, DeFi push wallets up 53%
Institutional interest is accelerating the mainstreaming of stablecoins. In the last year alone, the number of active stablecoin wallets jumped from 19.6 million in February 2024 to 30 million in February 2025—a 53% increase.
This trend aligns with the growing role of stablecoins in decentralised finance, cross-border payments, and crypto trading.
The rise in active wallets highlights increasing user engagement, while the total supply of stablecoins also rose sharply. From $138 billion in February 2024, the overall supply has now reached $225 billion—a 63% year-on-year growth.
Citigroup attributes these gains to greater adoption by both institutions and retail users seeking dollar-pegged stability in volatile crypto markets.
Traditional banks push back on new issuers
Despite the surge in demand, not all players in the financial system are on board. Some traditional banks have reportedly lobbied for tighter control over stablecoin issuance, aiming to prevent what Citigroup describes as “deposit substitution”.
This refers to users moving funds away from traditional savings accounts into stablecoins, which could disrupt the conventional banking model.
Banks are therefore advocating for restrictions on which entities can issue stablecoins. Their concerns stem from the potential for stablecoins to bypass the banking system while still offering interest-bearing returns and frictionless transfers, especially as regulatory clarity improves.
Fed sees stablecoins as dollar boosters
Federal Reserve Governor Christopher Waller recently commented on the issue, suggesting that stablecoins pegged to the dollar could help reinforce the currency’s dominance globally.
He acknowledged their current role in facilitating efficient transfers within the crypto space and noted their contribution to financial innovation.
Waller’s remarks come amid heightened policy debates around how to regulate digital assets without stifling their development or exposing consumers to new risks.
With stablecoins increasingly seen as an integral part of the future financial ecosystem, Citigroup’s forecast outlines both the opportunity and the challenge. The trajectory towards a multi-trillion dollar market may be underway—but only if policy keeps pace with technology.