Citigroup Stablecoin Research Report: Digital Dollars, Cryptopunk to Government Banking

This article explores the future potential of stablecoins and blockchain in the financial and public sectors, analyzing how regulatory changes could become a key opportunity for driving application expansion. (Background: Citigroup Report: Blockchain May Experience a 'ChatGPT Moment' This Year, Stablecoin Market Cap Expected to Reach $1.6 Trillion by 2030) (Supplementary Background: Tether Cross-Chain Stablecoin USDT0 Lands on Flare! $FLR Soars 18%, Is XRP DeFi Ecosystem Benefiting?) The origin of public blockchain networks can be traced back to the release of the Bitcoin white paper in 2008 and the birth of the genesis block in 2009. However, the conceptual foundation of blockchain has actually been gradually constructed over several decades since the 1970s. Despite this, the application scope of blockchain in the financial and public sectors remains relatively limited so far. The open-source and decentralized characteristics of blockchain are rooted in a core idea that mathematics and code can ensure privacy and freedom. From its cryptopunk origins, blockchain is not just a technical innovation; it carries a strong political color and is essentially a philosophy of anti-establishment, representing opposition to existing institutions (whether banks or governments). Cryptopunks are a group of advocates for using cryptographic technology and privacy-enhancing techniques to drive social and political change. Public key cryptography first appeared in the mid-1970s, while hash functions and Merkle trees were born in the late 1970s. At the same time, the development of the modern internet is also noteworthy. In the 1980s, Arpanet began adopting the TCP/IP protocol, and by the early 1990s, the World Wide Web was officially born. However, during the booming development of the internet in the 1990s, an important element called 'Digital Money' was missing. The Bitcoin white paper released in 2008 proposed the establishment of a 'peer-to-peer electronic cash system,' a concept that gradually gained traction in the following years, leading to a significant increase in Bitcoin usage. As of April 2025, Bitcoin remains one of the dominant cryptocurrencies in the crypto ecosystem, holding a market share of 64%. Entering the 2020s, the narrative around blockchain underwent nearly a 180-degree transformation. Once an anti-establishment movement, it has gradually moved into the mainstream. Between 2023 and 2024, 'real-world asset tokenization (RWA)' has become one of the dominant narratives in the crypto ecosystem. By the end of March 2025, one of the largest holders of Bitcoin is a Bitcoin ETF fund in the United States. Furthermore, other U.S. institutions, including the U.S. government, are also among the top ten holders of Bitcoin. In 2025, just days before the inauguration of the 47th President of the United States, the $TRUMP meme coin will be launched on the Solana blockchain. Stablecoins, as a form of digital currency based on blockchain networks, have tremendous development potential. In recent years, the usage of stablecoins has shown a rapid growth trend. It is expected that between 2025 and 2030, as regulatory transparency continues to improve (especially in the U.S.), the usage of stablecoins may further increase significantly. Additionally, public chains can bring higher transparency and enhanced trust. Whether in wealthy or poor countries, public institutions are striving to enhance their trust index, and these characteristics of public chains are exactly what they urgently need. The adoption of blockchain is advancing with the evolution of regulations and ongoing demands for transparency and accountability. Looking back at the history of blockchain in 2025, how should we view the future of stablecoins and blockchain? Citigroup's latest research report (Digital Dollars—Banks and Public Sector Drive Blockchain Adoption) may provide an answer, focusing on two key areas: new financial instruments (such as stablecoins) and the modernization of legacy systems. Therefore, we have conducted a more detailed translation of this, as its discussion on the stablecoin GPT moment is very worthy of reference. Coincidentally, two years ago on May Day, we were also translating Citigroup's (Money, Tokens, and Games (Blockchain’s Next Billion Users and Trillions in Value)) article, which was subtitled Blockchain’s Next Billion Users and Trillions in Value. In the 2023 report, Citigroup predicts that by 2030, Billion Users will come from: currency, social, and games. Looking back from 2025, apart from the transient nature of SocialFi and GameFi at that time, this gap will be filled by users holding cryptocurrencies or stablecoins, which is also the origin of Citigroup's 2025 stablecoin research report. The full text contains 18,000 words, enjoy: Key Takeaways Under the impetus of regulatory changes, 2025 could become the 'ChatGPT moment' for blockchain applications in the financial and public sectors. By 2030, the total circulating supply of stablecoins could grow to $1.6 trillion under our expected baseline scenario and potentially reach $3.7 trillion under our optimistic scenario. Nevertheless, if challenges in application and integration persist, this figure may be close to $500 billion. We expect the supply of stablecoins to continue to be dollar-denominated (about 90%), rather than central bank digital currencies (CBDCs) promoted by countries. The regulatory framework for stablecoins in the United States may drive net new demand for U.S. Treasury bonds, making stablecoin issuers some of the largest holders of U.S. Treasury bonds by 2030. Stablecoins pose a certain threat to the traditional banking ecosystem by replacing deposits. However, they may also offer new service opportunities for banks/financial institutions. The public sector's application of blockchain is also increasingly gaining attention, thanks to the ongoing focus on transparency and accountability in public spending, as reflected in the U.S. government's DOGE (Department of Government Efficiency) initiative and various central bank and multilateral development bank blockchain pilot projects. Major use cases of blockchain in the public sector include: spending tracking, subsidy distribution, public record management, humanitarian aid activities, asset tokenization, and digital identity. Although the on-chain transaction volume in the public sector may initially be small and the risks remain high, the increased interest from the public sector could be an important signal for the broader application of blockchain. 1. Why is the large-scale adoption of blockchain happening now? Why is 2025 likely to become the 'ChatGPT moment' for blockchain applications in the financial and public sectors? The supportive stance of U.S. regulators towards blockchain is expected to become a game-changing year for the industry. This could lead to broader adoption of blockchain-based currencies and stimulate the emergence of other use cases in the U.S. private and public sectors in finance and other areas. Another potential catalyst is the ongoing focus on transparency in public spending...