Citibank: "Stablecoins, the key driver to lead the next growth phase of virtual assets"

U.S. Citibank (Citi) has released an analysis that stablecoins will lead the next growth phase of the virtual asset (cryptocurrency) market.

On the 20th (local time), according to CoinDesk, Citibank said in a report that "since the GENIUS Act passed in the U.S. in July, the market capitalization of stablecoins has continued to rise alongside the overall virtual asset market," and "we have upwardly revised the 2030 stablecoin market size forecast to US$1.9 trillion from previous estimates."

The report explained that stablecoins have consistently accounted for 5~10% of the total virtual asset market capitalization and are still being used as a primary means of market entry (on-ramp) into the cryptocurrency market. Citibank analyzed that "the impact of stablecoins on bank deposits will be limited," and added, "like the rise of money market funds in the 1980s, they may cause some changes in funding costs or lending capacity, but they will not undermine the stability of the entire financial system."

It also identified the main driver of stablecoin adoption as the 'store of value' function. Citibank said, "In emerging markets facing inflation and institutional instability, demand for dollar-denominated assets is rising and stablecoin use is increasing," and "this may deepen a preference for dollar assets, but countries may also take policy measures to respond to rising dollar dependence."

The report also mentioned a potential weakening of Ethereum (ETH)'s dominance. Citibank warned that while the stablecoin boom is driving activity on the Ethereum network, if issuers build their own blockchains, Ethereum's dominance could be weakened. However, it added that network effects will likely preserve Ethereum's advantage in the short term.