Source: Cointelegraph
Original: “Citigroup: Blockchain Technology May Experience an Adoption Wave Similar to the 'ChatGPT Moment'”

Investment banking giant Citigroup stated that regulatory changes could become a catalyst for the large-scale adoption of stablecoins and blockchain technology in 2025.

The Citigroup financial analyst team noted in a report on April 23: "With the push of regulatory changes, 2025 is expected to become the 'ChatGPT moment' for the application of blockchain in the financial and public sectors."

With the dual impetus of increasing regulatory support and higher adoption rates by financial institutions, the market value of stablecoins is expected to reach a peak of $3.7 trillion by 2030, with a baseline scenario of $1.6 trillion.

Citigroup stated in the report: "The clarification of U.S. regulatory policies could become a major catalyst for enhancing the acceptance of stablecoins, which will drive the broader integration of stablecoins, particularly blockchain technology, into the existing financial system."

"The favorable factors of regulatory support, along with the deep integration of digital assets in traditional financial institutions, are creating favorable conditions for the growth of stablecoin usage."

After the Trump administration took office earlier this year with a friendly attitude towards cryptocurrencies, lawmakers are weighing stablecoin legislation, including the GENIUS Act, which aims to regulate U.S. stablecoins and ensure their legal use in the payment sector.

According to the report, the establishment of a regulatory framework for U.S. stablecoins will also support the demand for risk-free dollar assets both domestically and internationally.

Citigroup stated: "Stablecoin issuers must purchase U.S. Treasury bonds or similar low-risk assets as the safe underlying collateral for each stablecoin."

"By 2030, the scale of U.S. Treasury bonds held by stablecoin issuers may exceed that of any single jurisdiction currently."

Citigroup predicts that the future supply of stablecoins will continue to be denominated in U.S. dollars, while non-U.S. entities may promote their own currencies or central bank digital currencies (CBDCs).

In April, the market value of stablecoins surpassed $230 billion, a 54% increase from last year, with Tether (USDT) and USDC accounting for 90% of the market share.

Citigroup pointed out: "While the dominance of the dollar may evolve over time, and the euro or other currencies may be driven by national regulations, many non-U.S. policymakers may view stablecoins as tools of dollar hegemony."

"The geopolitical situation remains fluid. If the world continues to move towards multipolarity, policymakers in China and Europe may actively promote central bank digital currencies (CBDCs) or stablecoins issued in local currencies."

However, the market still faces some challenges. If "the challenges of adoption and integration persist," the market value of stablecoins may stabilize around $500 billion.

According to Citigroup's data, de-pegging has also been marked as a potential issue. In 2023, there were 1,900 de-pegging incidents, including a significant de-pegging event of USDC following the collapse of Silicon Valley Bank.

The agency stated: "Significant de-pegging events could suppress liquidity in the crypto market, trigger automatic liquidations, impair trading platforms' ability to meet redemption requests, and potentially have broader contagion effects on the financial system."

Related: Fidelity: The decline in exchange Bitcoin (BTC) supply "is due to purchases by listed companies."

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