JPMorgan warns that the stablecoin boom may not be what it seems

TLDR

• Stablecoin transaction volume will reach an estimated $17.2 trillion annually in 2026
• Higher “speed” means that the same stablecoins can handle more transactions without requiring more supply
• The market capitalization of stablecoins increased by nearly $100 billion last year, exceeding $300 billion including yielding stablecoins.
• JP Morgan predicts that the market value of stablecoins will reach only $500-600 billion by 2028, not trillions.
• Payments between consumers, businesses and merchants are the fastest growing sector, with leading use in Asia

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Stablecoins are being used more than ever, but this does not mean that the total value of stablecoins in circulation will grow at the same pace. This is the opinion of analysts JP Morgan.

The bank’s analysts, led by Managing Director Nikolaos Panigirzoglou, published a report saying that the stablecoin’s rising velocity is the key factor to watch. Velocity measures the number of times the same stablecoin changes hands over a period of time.

When speed is high, fewer stablecoins can process a much larger number of transactions. Therefore, even if payments using stablecoins grow sharply, the total market cap should not grow by the same amount.

“As stablecoin-based payment systems become more widely used, their efficiency and thus speed will increase,” the analysts wrote. “Higher speed will likely limit the expansion of the stablecoin universe in the future.”

Onchain stablecoin transaction volume is now around $17.2 trillion annually, based on annual data for 2026. This is a big number, and reflects real growth in how stablecoins are used day in and day out.

The market capitalization of stablecoins has increased by nearly $100 billion over the past year. When yielding stablecoins are included, the total exceeds $300 billion.

This growth has actually outpaced the broader cryptocurrency market, which analysts say indicates that stablecoins are being used for more than just trading or as collateral in cryptocurrencies.

Payments drive growth

Consumer-to-business and merchant payments are growing faster than consumer-to-consumer transfers, according to JPMorgan. They cited data from venture capital firm a16z crypto to support this.

Consumer-to-consumer payments still make up the largest share of stablecoin activity overall. But the shift towards merchant payments shows that stablecoins are moving more into day-to-day trade.

Analysts noted that Asia remains the largest region for stablecoin use.

JPMorgan also noted the passage The law of genius In the United States as a factor that helped boost the volume of transactions. The legislation provided a clearer regulatory framework for stablecoins.

JP Morgan’s cautious long-term view

This is not the first time that JPMorgan has backed away from its bullish stablecoin forecast. In December 2024, analysts said they did not expect the market capitalization of stablecoins to reach trillion-dollar levels.

They predicted the market would reach around $500 to $600 billion by 2028. Going back to May 2024, they also called others’ trillion-dollar predictions “overly optimistic.”

The latest report maintains the same cautious stance. Strong growth in usage is real, but the mechanics of speed mean that the market cap number is likely to grow more slowly than the transaction numbers suggest.

Asia continues to lead global stablecoin activity, and merchant payment adoption is expanding, based on the latest data cited in a JPMorgan report.