A new report from Citi finds 2025 may be "blockchain's ChatGPT moment" with regulatory change driving rapid adoption in the financial and public sector and an uptick in stablecoin use.
"I've been looking at crypto and blockchain for almost a decade now and we've consistently heard that the institutions are coming, or banks and big investors are coming and we've had a little bit of that," said Ronit Ghose, global head of Future of Finance at the Citi Institute who is an author of the report. He noted there has been some adoption with the increase in ETF options and players like BlackRock entering the space.
"It feels like we're at the takeoff point of something really quite big happening in stablecoins, given the impending legislation," Ghose said. "There's obviously a huge amount of change happening in the U.S., from a legislative, regulatory, political environment when it comes to stablecoins, blockchain-based assets and, more broadly, novel emerging technologies."
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The supply of stablecoins has already grown thirty times over the last five years, according to the report.
"If you look at the growth of stablecoins in the last three or four years, they've gone from close to nothing to over a couple of $100 billion and they're growing," Ghose told American Banker. "The main driver, or the main use of stablecoins is as a crypto ecosystem token. It's almost like a U.S. Treasury asset or the cash leg of the crypto ecosystem. If you sell an asset, whether it's bitcoin or something else, you don't want to necessarily take it out of the crypto ecosystem and move it into your bank account. You want to keep it in the crypto ecosystem on-chain. So what's the best place to park it? The equivalent of cash becomes de facto the stablecoin. Q4 saw a big rally in the crypto markets and when that happens, stablecoin activity goes up."
If the U.S. does pass a regulatory framework for digital assets, the analysts believe it could drive new demand for U.S. Treasuries. This could make stablecoin issuers among the largest U.S. Treasuries holders by 2030. The report estimates $1 trillion net new purchases of U.S. Treasuries under their base model.
There are two bills making their way through Congress aiming to regulate stablecoins: the GENIUS Act in the Senate and the STABLE Act in the House. Both bills have been passed through committee with bipartisan support and President Donald Trump has
The bills are largely similar — both would clarify that the digital assets are not securities and not under SEC jurisdiction, and each has options for issuers to be regulated at the state level rather than federal in some cases.
While stablecoins do pose a threat to traditional banking systems as an alternative method of deposit, the analysts found the opportunity presented will likely outweigh any concerns. Stablecoin adoption is likely to offer banks and other financial institutions new opportunities for services, the report found. Ghose said he's heard from people in traditional finance and crypto who think stablecoins will hurt the U.S. dollar. But in his research, he has found the opposite to be true.
"The growth of stable coins and the growth of tokenized financial assets is a big positive for the dollar," Ghose said.
