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 described stablecoins as the “ChatGPT moment” for the institutional adoption of blockchain technology.

Akin to the rise of artificial intelligence (AI) chatbots, the report anticipates stablecoins will experience significant growth in valuation over the coming years. While Citi forecasts a $1.9 trillion base case valuation for the asset class, the report also suggests stablecoins could climb to $4 trillion by the end of 2030 in its bull case scenario.

Currently, the global stablecoin market capitalization sits at $307 billion, up from $200 billion at the start of 2025. Citi bases its prediction on the 58% growth stablecoins achieved in 2025 alone, with analysts forecasting that this upward trend will continue through the decade.

### Growing Momentum in Stablecoin Projects

Aside from the strong performance in 2025, Citi analysts have highlighted an influx of 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 number of U.S.-based financial institutions are planning their own stablecoin rollouts.

Citi attributes this surge in stablecoin initiatives to fresh regulatory support in the U.S., notably marked by the signing of the GENIUS Act by U.S. President Donald Trump.

### Use Cases and Industry Impact

While use cases for stablecoins have expanded to include domestic and cross-border payments, Citi notes that the stablecoin boom will not completely overhaul the existing financial system. Instead, analysts view this innovation as continued progress toward smarter, more efficient finance.

“We don’t believe crypto will burn down the existing system,” the Citi report reads. “Rather, it is helping us reimagine it.”

The report points out that domestic payments systems are already capable of processing payments in real-time and at low costs, providing stiff competition for stablecoins. However, cross-border payments remain the primary use case for stablecoins, with fintech firms and traditional financial institutions making significant progress to reduce settlement times and fees.

### Challenges Facing Stablecoins

Despite the positive outlook, Citi’s forecast also acknowledges several challenges within the stablecoin sector.

– **Regulatory Uncertainty:** Outside the U.S., regulatory frameworks remain unclear, hindering global adoption.
– **Reserve Transparency:** Questions about the reserves backing stablecoins continue to be a concern for issuers.
– **Market Manipulation Allegations:** Some stablecoins have faced accusations related to market manipulation.
– **High-Profile Collapses:** Failures such as TerraUSD (UST) have raised fears over collateral transparency, prompting tighter regulatory measures.

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### Digital Asset Exchange Users Prioritize Trust Over Low Fees: Kraken Survey

Mark Greenberg, global head of consumer at Kraken, revealed that U.S. digital asset users are not blindly chasing low fees but instead are weighing several factors when choosing an exchange.

The survey found:

– Only 16% of respondents cited fees as the primary consideration when selecting an exchange.
– 26% identified trustworthiness as the most important factor.
– 14% prioritized security features.

“As the market matures, investors value long-term confidence over short-term savings,” said Greenberg. “People want to know their assets are safe, that the platform is reliable, and that they can access the tools they need without unnecessary complexity.”

Interestingly, regulatory compliance was not a major concern for many users; only 6% said it influenced their exchange choice. Customer support was a significant factor for just 7% of respondents.

Given the variety of considerations, 44% of survey participants maintain accounts with at least two digital exchanges, while nearly 26% use over three platforms. This diversification allows users to manage platform risk and access a broader range of listings.

Kraken’s report also noted that trading volumes on decentralized exchanges have surged by 259% since 2024, driven by the increasing popularity of platforms like Hyperliquid and Astar.

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### Stiff Competition Among U.S. Exchanges

While Coinbase (NASDAQ: COIN) holds the largest market share among digital asset exchanges, several competitors are eager to expand their presence.

Kraken is considering going public, with plans to raise funds ahead of a tentative IPO in 2025, following the footsteps of Gemini and Coinbase.

However, amid this flurry of IPO activity, a race for regulatory compliance is intensifying among U.S.-based exchanges. This competitive atmosphere is compounded by recent security concerns, including customer data leaks at Coinbase and critical bugs at Kraken. These issues have led users to approach exchange selection with increased caution.

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### Watch | MiCA and the Future of Stablecoins: What Comes Next for Tether?

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The stablecoin market stands at a pivotal point, poised for significant growth amid supportive regulation, rising adoption, and evolving use cases. However, challenges related to regulatory clarity and security remain critical areas to watch as the industry matures.
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