US banking giant Citigroup has revised its 2030 forecast for the global stablecoin industry, citing strong market growth, accelerated adoption, and conducive regulatory developments.

In a new outlook report, released in September 2025, the bank increased its base case forecast to US$1.9 trillion, up from the US$1.6 trillion it predicted in April 2025.

It also lifted its bull case prediction from US$3.7 trillion to US$4 trillion, and its bear case to US$0.9 trillion, up from US$0.541 trillion. These increases reflect stronger adoption trends than previously anticipated, including new favorable regulations, increased institutional acceptance, and soaring transaction volumes across real-world applications.

Citigroup attributes almost half of its US$1.9 trillion base case stablecoin issuance forecast to deposit substitution in the US and overseas. It models stablecoin demand equivalent to 2.5% of 2030 US bank system deposits driven by the growth of digitally native companies, including e-commerce, promoting stablecoins as a means of payments and an in-platform token.

Furthermore, the base case assumes a continuation of the crypto-related stablecoin issuance run rate observed over the past three years, or approximately 20% annually. The bull case, on the other hand, projects a faster annual growth trajectory of 30%, driven by increasing regulatory clarity and rising allocation of institutional capital into cryptocurrency assets.

Additionally, the forecast assumes 10% substitution of US banknotes held overseas into stablecoins. It references this to the experience of gold exchange-traded funds (ETFs), which capture nearly 8% of the investible gold bars and coins market by offering a lower-friction investment vehicle.

Market growth and momentum

Over the past six months, momentum in the global stablecoin market has accelerated, with issuance volumes growing over 20% during the period and rising by nearly 40% year-to-date (YTD). Issuance volumes currently stand at about US$280 billion, compared with US$200 billion at the start of the year.

Stablecoin transaction volumes are also surging. Once negligible, these digital currencies now measure in the trillions of dollars annually, scaling rapidly compared to other traditional payment systems. On an adjusted basis, stablecoin volumes are running close to US$1 trillion per month in August 2025, nearly double the levels from just a year ago, the Citigroup report says.

Though stablecoin transaction volumes are still largely driven by crypto trading and related activities, these digital currencies are rapidly being adopted across cross-border payments, peer-to-peer (P2P) remittances, business-to-business (B2B) payments, and treasury management.

Factors driving stablecoin interest

Soaring stablecoin issuance and transaction volumes are being fueled by increased integration by payment networks, developments in layer-1 blockchains, and regulatory clarity in key markets, including the US and the European Union (EU).

In July 2025, Paul S. Atkins, the chairman of the US’s Securities and Exchange Commission (SEC) unveiled Project Crypto, a commission-wide effort to modernize US securities regulation for digital assets. This initiative aims to implement recommendations from the President’s Working Group Report on Digital Asset Markets and seeks to establish a clear regulatory framework to classify crypto tokens as security, commodity, or others. One of the proposals includes a unified licensing regime that would allow firms to offer a full suite of crypto financial services, such as trading, staking, and lending.

In the EU, the Markets in Crypto-Assets Regulation (MiCAR) entered into force in 2024, marking the first comprehensive crypto framework introduced by a major global economy. Key components of MiCA include licensing requirements for crypto-asset service providers, specific travel requirements, as well as rules covering the treatment of stablecoins.

In Asia and the Middle East, the central banks are building regulatory sandboxes and licensing regimes for stablecoin providers, setting the stage for further institutional adoption. For example, Hong Kong introduced licensing rules for stablecoins in August 2025 to help strengthen trust, transparency, and oversight.

Beyond regulations, other factors driving mainstream interest in stablecoins and on-chain money include increased integration of stablecoins by payment networks, including Visa and Mastercard, the introduction of tokenized deposits by banking institutions like JP Morgan and HSBC, as well as growth in tokenized financial assets.

The market for tokenized assets, which involves using digital tokens recorded on a blockchain to represent ownership rights, is currently estimated at US$600 billion. Boston Consulting Group (BCG) and Ripple expect the market to achieve a compound annual growth rate (CAGR) of 53% through 2033, and reach US$18.9 trillion by then.

Featured image: Edited by Fintech News Switzerland, based on image by thanyakij-12 via Freepik