The financial services giant Citi foresees explosive growth for the stablecoin market by the end of the decade.
Stablecoins are digital assets backed by high-quality short-term securities or cash-like assets that operate on blockchains.
In a new report, Citi says that in a best case scenario, the total market cap of stablecoins will surge to $4.0 trillion in the next five years.
“We are revising our stablecoin total issuance forecasts in this report to: $1.9 trillion base case (previously $1.6 trillion) and $4.0 trillion bull case ($3.7 trillion), due to the strong growth of the market in the past six months and the wide range of project announcements, in the U.S. and internationally.”
The bank says it is raising its original forecast in its April 2025 Citi GPS: Digital Dollars report because of the strong momentum in the ecosystem, which includes the integration by payment networks, launch of new layer-1 blockchains and regulatory clarity in key markets.
The report says the issuance volumes of the nascent asset grew by over 20% in the past six months and nearly 40% year-to-date.
During this period, US legislators passed the GENIUS Act to establish a regulatory framework for stablecoins. The European Union also began the enforcement of the Markets in Crypto-Assets Regulation (MiCAR) that covers electronic money tokens and Hong Kong introduced licensing rules for stablecoins.
“Summer 2025 has been dubbed ‘Stablecoin Summer’ by industry participants. New business activity around stablecoins, for solutions including commerce, payments and ‘real world’ applications, have heated up over the summer. We believe these could further power issuance and transaction volumes during 2026 and beyond.”
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