Citi Predicts Stablecoins Could Trigger a ‘ChatGPT’ Breakthrough for Blockchain, Surpassing $3.7T by 2030

Issuers of stablecoins may soon emerge as some of the largest holders of U.S. Treasury securities, potentially surpassing other major sovereign nations, according to a new report by global bank Citi.

Citi predicts that 2025 could be a transformative year for blockchain adoption, driven by the rapid rise of stablecoins — drawing parallels to how 2023 became the breakthrough year for artificial intelligence with the launch of ChatGPT.

“2025 could mark blockchain’s own ‘ChatGPT’ moment,” the analysts wrote in a report released earlier this week.

At the heart of this projection are stablecoins, cryptocurrencies that are pegged to traditional assets like the U.S. dollar. With major players like Tether’s $145 billion USDT and Circle’s $60 billion USDC leading the charge, stablecoins have experienced significant growth and are being increasingly used for cross-border payments and remittances.

Citi forecasts that stablecoins could grow to a $1.6 trillion market by 2030 in its baseline scenario, up from their current value of $230 billion, assuming that regulatory support and institutional integration continue to gain momentum. In its most optimistic projection, the market could expand to $3.7 trillion, though it acknowledges that ongoing structural challenges could keep the market closer to $500 billion in its bearish scenario.

A crucial catalyst for this expansion is the supportive regulatory environment in the U.S., especially following a presidential executive order calling for the creation of a comprehensive federal framework for digital assets. This regulatory clarity surrounding stablecoins could help them become more deeply embedded in the financial system, enabling faster payments, greater transparency, and more efficient settlement of assets.

“This could drive greater adoption of blockchain-based money and inspire additional use cases, extending across both financial and non-financial sectors in the U.S.,” the report stated.

Stablecoin Issuers Becoming Key U.S. Treasury Buyers

Stablecoins are likely to remain predominantly pegged to the U.S. dollar, with Citi predicting that 90% of stablecoins in circulation by 2030 will still be dollar-denominated, strengthening the dollar’s position as the world’s reserve currency.

This has profound implications for the global financial system. Stablecoin issuers could become major buyers of U.S. Treasuries if regulations push for the backing of stablecoins with low-risk, highly liquid assets such as government bonds. Citi estimates that issuers could hold up to $1.2 trillion in U.S. government debt by the end of the decade, potentially surpassing the holdings of all major foreign nations.

Meanwhile, central banks in regions like Europe and Asia are expected to continue developing their own central bank digital currencies (CBDCs), the report noted.

Challenges to Stablecoin Growth

Despite the positive outlook, the report also highlighted several risks that could impede stablecoin growth. In 2023 alone, stablecoins experienced nearly 1,900 instances of de-pegging, with more than 600 involving major tokens, according to Moody’s data.

Extreme scenarios, such as mass redemptions triggered by events like the collapse of Silicon Valley Bank (SVB) — which impacted USDC — can disrupt crypto liquidity, initiate forced sell-offs, and cause ripples throughout the broader financial markets, the authors cautioned.