tl;dr
Citigroup upgrades stablecoin market forecast to $1.9 trillion by 2030, but institutional adoption remains stagnant at 0.5/10, creating a stark divide between crypto optimism and real-world hesitancy.
**Citigroup Raises Stablecoin Forecast to $1.9 Trillion by 2030, But Institutional Adoption Lags**
The stablecoin revolution is accelerating, but not everyone is jumping on board. Citigroup, one of Wall Street’s most influential banks, has dramatically revised its forecast for the stablecoin market, projecting it could hit **$1.9 trillion by 2030**—up from $1.6 trillion in its April 2025 outlook. The bank even floated a “bull case” scenario of **$4 trillion**, fueled by regulatory clarity, technological progress, and growing integration into global payment systems. Yet, amid this optimism, a stark reality remains: **institutional adoption is still stuck at just 0.5 on a scale of 0 to 10**, according to Visa’s Catherine Gu.
### Why the Optimism?
Citigroup’s revised forecast hinges on three key drivers. First, **partial deposit substitution**—where consumers and businesses shift a portion of their bank deposits into stablecoins—could account for 45% of the market’s growth by 2030. The bank models 2.5% of U.S. bank deposits moving to stablecoins, a shift that could unlock trillions in liquidity.
Second, the broader crypto market’s expansion is expected to drive 40% of growth, with stablecoin issuance increasing by 20% annually. Third, **banknote substitution**—replacing physical cash with digital equivalents—could contribute 15%, particularly in overseas U.S. currency holdings and domestic transactions.
The numbers back this up. Stablecoin supply has already surged to **$292 billion** as of September 2024, up from $224 billion at the start of the year. Monthly transaction volumes now approach **$1 trillion**, nearly doubling year-ago levels. David Cunningham, Citi’s head of digital assets strategy, attributes this momentum to regulatory tailwinds like the **GENIUS Act** and the removal of friction by major platforms. “Stablecoin issuance volume is up 40% this year,” he said, pointing to a “tipping point” in adoption.
### The Institutional Chill
But here’s the catch: **corporations and institutional investors aren’t buying in**. Visa’s Catherine Gu described institutional stablecoin adoption as “maybe 0.5 on a scale of 0 to 10,” highlighting a gap between hype and reality. Large companies, already benefiting from favorable banking terms and fast payment systems, see little incentive to switch to stablecoins for high-value transactions.
Citi’s report also notes that most mainstream corporations remain “curious rather than enthusiastic” about stablecoins. The lack of cash-equivalent recognition under **IAS7** (International Accounting Standards) further deters corporate treasurers, who worry about accounting complexities.
### The Rise of Bank Tokens?
While stablecoins grab headlines, Citigroup sees a potential rival in **bank-issued tokenized instruments**. These include tokenized deposits and deposit tokens, which could capture **over $100 trillion in annual transaction volumes** by 2030. Unlike stablecoins, which operate on public blockchains, bank tokens leverage familiar regulatory frameworks and seamless integration with existing treasury systems.
### The Roadblocks
Even as the market grows, challenges persist. Fragmentation across blockchain networks, privacy concerns on public ledgers, and unresolved questions about accounting treatment threaten to slow adoption. Regulatory progress—like the GENIUS Act in the U.S. and frameworks in Hong Kong and the UAE—has eased some fears, but **interoperability, scalability, and trust** remain hurdles for enterprise-scale deployment.
### The Big Picture
Citigroup’s report paints a picture of a market on the cusp of transformation. But as Cunningham noted, the path to mainstream adoption isn’t just about technology—it’s about **trust, regulation, and real-world utility**. For now, stablecoins are a promising asset class, but their true potential may lie in the hands of institutions that haven’t yet taken the plunge.
What do you think? Will stablecoins finally break through in 2030, or will the institutional lag continue to hold them back? The answer could shape the future of finance.