JPMorgan questions the prediction that the stablecoin market will reach $1 trillion

According to news from Hash World, JPMorgan's analysts have pointed out that even if progress is made in the regulatory framework in the United States, the expectation that the total supply of stablecoins will increase from the current approximately $240 billion to three or four times that amount within the next year or two, approaching $1 trillion, is "overly optimistic." The GENIUS Act in the U.S. Senate has gained more support, with senators voting earlier this week to advance the bill. However, both proposals prohibit interest payments on stablecoins, defining them as "payment stablecoins" similar to traditional currencies. This limits the ability of stablecoins to compete with traditional interest-bearing instruments, while money market funds have seen an influx of $900 billion over the past year. JPMorgan's analysts report that the growth of non-interest stablecoins primarily depends on their use in payment systems and the broader expansion of the crypto ecosystem, including activities in DeFi, NFTs, and other areas. Major institutions like Standard Chartered and Citibank predict that stablecoins could exceed a supply of $1 trillion in the coming years, but JPMorgan remains skeptical. If stablecoins were allowed to pay interest, they could expand rapidly and attract significant growth from money market funds. However, with the proposed regulations prohibiting yield, their growth will largely depend on crypto usage and real-world application scenarios. At the same time, yield-bearing stablecoins (such as BlackRock's BUIDL and Figure Markets' YLDS) are expected to continue growing as idle crypto capital seeks returns. Analysts point out that if the stablecoin framework is passed, it will benefit compliant entities in the U.S., such as banks and fintech companies, while non-compliant issuers like Tether will face increased scrutiny. The analysis indicates that 18% of Tether's reserves do not comply with the GENIUS Act, and some crypto-backed or algorithmic stablecoins may face reductions or migration due to the proposed legislation. Analysts state that Tether has $5.6 billion in remaining reserves and profits accumulated over the years that can be adjusted when regulations are implemented.