Blockchain adoption could reach $3.7 trillion by 2030

Citigroup analysts have identified 2025 as a potential turning point for blockchain technology adoption, comparing it to a “ChatGPT moment” driven by regulatory changes.

In a report dated April 23, Citigroup highlighted that regulatory clarity in the United States could be the main catalyst for increased acceptance of stablecoins and broader blockchain integration into the financial system.

The report projects the stablecoin market capitalisation could reach $3.7 trillion by 2030 in an optimistic scenario, with a base case estimate of $1.6 trillion.

“The tailwinds of regulatory support and the increased integration of digital assets into incumbent financial institutions are setting the scene for increased usage of stablecoins,” Citigroup noted.

The current political environment, including the crypto-friendly stance of the US administration earlier this year, has led lawmakers to consider legislation such as the GENIUS Act, which aims to regulate stablecoins and ensure their legal use for payments.

According to the report, stablecoin issuers will be required to hold US Treasuries or similar low-risk assets as collateral, potentially resulting in stablecoin issuers holding more US Treasuries by 2030 than any single jurisdiction today.

Citigroup also predicts that the stablecoin supply will remain predominantly US dollar-denominated, while other countries may focus on central bank digital currencies (CBDCs) or national currency-backed stablecoins.

“While the dollar’s dominance may evolve over time, stablecoins may be viewed by many non-US policymakers as an instrument of dollar hegemony,” the report stated

Geopolitical factors could drive China and Europe to promote their own CBDCs or stablecoins in their respective currencies.

However, challenges remain, including adoption hurdles and risks like depegging events, which occurred nearly 1,900 times in 2023.

Citigroup warned that “a major depegging event would likely dampen crypto market liquidity, trigger automated liquidations, impair trading platforms’ ability to meet redemptions, and potentially have broader contagion effects for the financial system.”

As of April, the stablecoin market cap surpassed $230 billion, with Tether and USDC accounting for 90% of the market, according to Citigroup’s analysis.