A Citi (NASDAQ: C) report has predicted that the stablecoin market will achieve a $1.9 trillion valuation by the end of the decade in its base case scenario, while leaving room for an additional growth spurt. Citi analysts disclosed that stablecoins represent the “ChatGPT moment” for the institutional adoption of blockchain technology.
Akin to the rise of artificial intelligence (AI) chatbots, the report suggests stablecoins are set to experience significant growth in valuation over the coming years. While Citi forecasts a $1.9 trillion base case for the asset class, the report also envisions stablecoins climbing to $4 trillion by 2030 in a bull case scenario.
Currently, the global stablecoin market capitalization stands at $307 billion, up from $200 billion at the start of 2025. Citi bases its prediction on the impressive 58% growth recorded by stablecoins in 2025 alone, with analysts expecting this trend to continue through the end of the decade.
### Growing Interest and Regulatory Support
Beyond a strong 2025 performance, Citi analysts highlighted a surge in stablecoin project announcements within the ecosystem. Early in the year, Trump-backed World Liberty Financial (WLF) entered the stablecoin race with the launch of USD1. Additionally, a range of U.S.-based financial institutions are planning their own stablecoin rollouts.
Citi attributes this flurry of announcements to fresh regulatory support in the U.S., particularly following the signing of the GENIUS Act by President Donald Trump. While the use cases for stablecoins have expanded from domestic to cross-border payments, Citi notes that this boom will not completely overhaul the financial system. Instead, analysts view current developments as continued progress toward smarter finance.
“We don’t believe crypto will burn down the existing system,” the Citi report states. “Rather, it is helping us reimagine it.”
The report also points out that domestic payment systems are already capable of processing payments in real time and at low cost, providing significant competition for stablecoins. While cross-border payments appear to be the primary use case, fintech firms and traditional financial institutions are making strides to reduce settlement times and fees.
### Challenges Facing Stablecoins
Despite the positive outlook, Citi’s forecast also acknowledges several challenges facing stablecoins. Regulatory uncertainty remains a major hurdle outside the U.S., causing adoption delays in global markets.
For many stablecoin issuers, questions around reserves continue to linger, with some facing allegations of market manipulation. Moreover, high-profile stablecoin collapses such as TerraUSD (UST) have raised concerns over collateral transparency, prompting authorities to impose tighter regulations.
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### Digital Asset Exchange Users Prioritize Trust Over Low Fees: Kraken Survey
Mark Greenberg, global head of consumer at Kraken, shared insights from a recent study indicating that U.S. digital asset users don’t merely chase low fees but consider a variety of factors when selecting an exchange.
According to the survey, only 16% of respondents identify fees as their primary consideration when choosing where to buy and sell digital assets. In contrast, 26% value trustworthiness above all, while 14% prioritize robust security features.
“As the market matures, investors are showing they value long-term confidence over short-term savings,” Greenberg noted. “People want to know their assets are safe, the platform is reliable, and they have access to the tools they need without unnecessary complexity.”
Interestingly, regulatory compliance played a relatively minor role, with only 6% of respondents considering it a factor. Similarly, customer support features influenced 7% of participants.
Reflecting the diverse preferences, 44% of respondents maintain accounts with at least two digital exchanges, while nearly 26% use over three. Multiple accounts allow users to diversify platform risk and access a wider range of asset listings.
The report also highlighted a 259% surge in trading volumes on decentralized exchanges since 2024, driven by growing popularity of platforms like Hyperliquid and Astar.
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### Stiff Competition Among U.S. Digital Asset Exchanges
While Coinbase (NASDAQ: COIN) currently holds the largest market share among digital asset exchanges, several service providers are vying to grow their presence.
Kraken, for example, is considering going public with immediate plans to raise funds ahead of a potential IPO in 2025, following the footsteps of Gemini and Coinbase.
Amid this wave of IPOs, U.S.-based exchanges face a competitive regulatory compliance race, although recent security breaches have raised concerns. Coinbase has experienced multiple customer data leaks, and Kraken has encountered critical software bugs, prompting users to exercise caution when choosing an exchange.
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### Watch | MiCA and the Future of Stablecoins: What Comes Next for Tether?
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