JPMorgan has poured a cold water on stablecoins: 500 billion? I think it's precarious! But don't panic, there's a gold mine hidden in this cold water!

Tang Seng explains in plain language:

In simple terms, JPMorgan released a report saying they were too optimistic before. They previously thought that by 2028, stablecoins like USDT and USDC, which are pegged to the dollar 1:1, could reach a market cap of 1 trillion dollars? Now they've changed their tune, saying reaching 500 billion would be good! Why? They believe this thing has not become the everyday money for people to buy groceries or for companies to pay salaries as everyone claims. In reality, the vast majority is still being played with by insiders, and the actual usage for payments is very limited.

Why is paying so difficult? JPMorgan pointed out three pain points:

Who saves money if it's not profitable? If you keep money in a bank's current account or buy a money market fund, at least you'll earn some interest. But saving in stablecoins? Nothing at all! Big funds see this as foolish. Better to save in a bank.

Exchanging money is too troublesome and expensive! You want to use stablecoins to pay? You first need to exchange RMB/USD for stablecoins, right? Banks charge one fee, exchanges charge another, and on-chain transfers might charge yet another... After all those deductions, the little savings on cross-border fees are long gone, and after all the hassle, you might even end up losing money!

The national team has taken action! China is developing digital RMB, Europe is working on digital euro, Israel is creating digital shekel... Countries are all developing their own official digital currencies. With the state-backed currency coming, how can you, a wild child, compete for a meal? If policies clamp down on you, you'll be in trouble.

Clash of opinions: Bearish vs Supportive, who's bragging?

Bearish camp: JPMorgan: 500 billion is the ceiling! The payment dream is shattered!

Supporters: Standard Chartered, Bernstein, etc.: Nonsense! If that (GENIUS Act) really gets implemented, 20 trillion or even 40 trillion could be possible by 2028! What's the reason?

Emerging markets as a 'lifeline': For example, in Turkey, a 58% inflation rate is terrifying, and the money in people's hands is rapidly depreciating. What to do? Nearly half of the people hoard USDT as digital gold to preserve value! It's much more convenient than buying real gold and silver.

Industry giants are entering the game to put US debt on the blockchain: Super giants like BlackRock and Fidelity, managing trillions of dollars, are considering tokenizing traditional assets like US Treasury bonds into on-chain stablecoins. If they succeed, the amount of funds will be nuclear-level!

The regulatory blade: is it a boon or a bane? It all depends on who gets cut!

The recently passed (GENIUS Act) appears to set rules for stablecoins, but a closer look reveals:

The 'nobility' of licensing: In the future, only banks or large institutions with special licenses may be allowed to issue stablecoins. Players like Tether, which have a grassroots origin, may be forced out! Meanwhile, Circle, which has good relations with big banks, may find itself laughing all the way to the bank.

Algorithmic stablecoins have been sentenced to death: Luna's UST, which maintained stability through code algorithms, collapsed and harmed countless people, leading to a direct ban. This is a blow to DeFi innovation.

Hong Kong is also racing ahead! While the US is still debating, Hong Kong's ZhongAn Bank has already obtained the first stablecoin license, and big companies like JD.com and Standard Chartered have also entered the testing phase. The Eastern battlefield has already begun!

Tang Seng's personal opinion:

Don't let JPMorgan scare you! Their call of 'it's over' actually reveals the fear of traditional banks!

Think back to when Alipay and WeChat Pay just came out. Didn't banks scold them as gambling tools and unsafe? And what happened? Now, who doesn't use QR codes to pay?

The real killer feature of stablecoins is not to replace your grocery money, but to explode in places that the traditional banking system cannot reach or is too exploitative!

The Turkish use of USDT to combat inflation is a living example! Latin American workers use PYUSD to send money back home. Low fees and fast speed make this a real demand! What is this called? This is called rural encirclement of cities! JPMorgan, watching the supermarkets in New York and London, certainly can't see this, but grassroots demand is the spark that can ignite a prairie fire.

Compliance is a necessary growing pain. The surviving giants after the reshuffle, combined with cross-border, value-preserving, inclusive finance, 500 billion? I see that as just a starting point!

So, folks, do you think JPMorgan is a prophet or an old fossil?

Do you have examples around you using stablecoins for practical purposes? For example, doing cross-border business, combating inflation? Let's talk in the comments!

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