LIVE MARKETS-Citi boosts stablecoin outlook

Citi Research has raised its stablecoin market size forecast to $1.9 trillion by 2030 in its base case and $4.0 trillion in its bull case, up from previous estimates of $1.6 trillion and $3.7 trillion. The increase is attributed to growing demand from the crypto ecosystem, e-commerce, and offshore buyers. Currently, stablecoins have a market value of about $300 billion. Citi anticipates that bank tokens may surpass stablecoins by 2030, indicating a shift towards more efficient financial systems.

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CITI BOOSTS STABLECOIN OUTLOOK

Citi Research raises its forecast for stablecoin market size to $1.9 trillion by 2030 in its base case and $4.0 trillion in its bull case scenario, from its April estimate of $1.6 and $3.7 trillion respectively.

“Today we expect stronger stablecoin growth compared to 6-9 months ago,” strategists said, citing demand from the crypto-native ecosystem, e-commerce and digitally native firms, and offshore buyers seeking U.S. dollar exposure.

Stablecoins, which aim to hold a constant value typically pegged 1-to-1 to the dollar, have a combined market value of about $300 billion, according to CoinGecko.

Their use has surged among crypto traders shifting funds between tokens, and the industry hopes they will gain mainstream traction for instant payments.

Citi said the turnover of bank tokens could exceed stablecoins by 2030, even with a modest shift of current traditional rails on chain.

“It is not a digital format war that we foresee. But a continued progress towards smarter, faster finance,” Citi strategists wrote.

(Medha Singh)