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Stablecoins Might Revolutionize Payments — But What If They Don’t?

Stablecoins have long been touted as a groundbreaking innovation for global finance. With promises of fast, borderless transactions and transparent smart contracts, they appear to offer a futuristic alternative to traditional payment systems. But more than a decade since their debut, stablecoins have yet to deliver on much of their real-world potential outside of crypto trading. So what if they never do?

The Hype: Big Numbers, Bold Predictions

Despite limited adoption, investor enthusiasm remains strong. Circle’s IPO saw leading banks like Goldman Sachs, Citi, and JPMorgan floating enormous projections. Goldman expects the stablecoin market to surpass $1 trillion, while Citi includes $195 trillion in cross-border transfers and $1 quadrillion in SWIFT transactions in its potential market size. JPMorgan even considers a 10% share of the $22 trillion U.S. M2 money supply a “realm of possibility.”

1: Stablecoin là gì? Đầu tư Stablecoin đem lại lợi ích gì?

The Reality Check: A More Modest Path

JPMorgan’s Global Markets Strategy team offers a more grounded view. Analyst Nikolaos Panigirtzoglou estimates a rise to just $500 billion in stablecoin circulation by 2028, driven mostly by their current role as liquidity providers within the crypto ecosystem — which makes up 88% of today’s usage.

Hãng dịch vụ tài chính JPMorgan ra dịch vụ đầu tư IndexGPT, để lộ tham vọng lớn với AI - Nhịp sống kinh tế Việt Nam & Thế giới

The team argues that holding zero-yield assets like stablecoins is unattractive amid inflation, and speculative estimates of growth often ignore existing financial realities.

Crypto Expansion and Emerging Markets

JPMorgan predicts the overall crypto universe could double between the 2024 and 2028 Bitcoin halvings, implying a ~$140,000 Bitcoin price. Meanwhile, growth in emerging market (EM) economies may also drive demand for dollarized deposits — the IMF projects a 23% EM GDP increase by 2028.

However, illicit activity won’t be a stablecoin growth engine, especially under stricter global regulations.

Tiền điện tử là gì? Hướng dẫn đầu tư tiền điện tử từ A-Z

Payments Friction: The On/Off Ramp Problem

In theory, stablecoin-based payments could be faster and more efficient. But in practice, converting from fiat to stablecoins and back — the “on/off ramps” — adds cost and complexity.

Traditional systems, bolstered by fintech, already offer fast, efficient rails. Even a 10x increase in stablecoin payment use would only add $150 billion to the ecosystem — far from transformational.

Circle Unveils Stablecoin-Based Global Payments Network for Real-Time Transfers | Yellow.com

The e-CNY Comparison: Apples to Oranges

Some point to China’s e-CNY (digital yuan) as a model. Its market cap has exploded to over RMB 300 billion since late 2022. But JPMorgan emphasizes that it’s a central bank liability, not a private asset like stablecoins. Also, the e-CNY operates on a centralized network — unlike blockchain-based stablecoins — and competes with services like Alipay and WeChat Pay.

Đồng e-CNY bắt đầu được sử dụng trong giao dịch kỳ hạn | Vietnam+ (VietnamPlus)

Fintech’s Success Undermines the Case for Stablecoins

Rather than proving the need for blockchain, Alipay and WeChat Pay show that private digital money, backed by public liabilities and integrated with banking networks, works just fine. Their success is seen more as a fintech revolution, not a crypto one.

In fact, their dominance could reduce demand for blockchain-based payment alternatives.

Early Use Cases Show Promise — But Not Disruption

The Case for Stablecoins: A Better, Safer Solution

Stablecoin advocates highlight emerging real-world applications. Circle’s cross-border payments network began processing its first transactions in May, though it still leans on traditional systems for FX and settlement. Circle is also exploring using stablecoins as collateral with ICE, aiming to lower trading margins.

Yet with all stablecoins combined accounting for less than 0.5% of quarterly U.S. equity volumes, real disruption remains distant.

Conclusion

Stablecoins still carry potential, but expectations must be tempered. The technology faces practical hurdles — from regulatory friction and poor infrastructure to competition from fintech. Despite the hype, stablecoins are far from revolutionizing payments. And as JPMorgan hints, some of that optimism might be better suited for marketing decks than financial projections.

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