Stablecoin Adoption Expands Beyond Crypto Exchanges with Growing Wall Street Interest
Stablecoin adoption is rapidly expanding beyond crypto exchanges into payments, payroll, and treasury functions, driven by the advantages of 24/7 settlement and digital-native money movement.
Banks are issuing and tokenizing deposits as a regulated alternative that offers similar benefits to stablecoins. JPM Coin is cited as a prime example, and HSBC has signaled interest in this emerging market.
The endgame is described as a two-track system: stablecoins will serve as an open, two-party settlement mechanism, while deposit tokens will operate within bank ecosystems. However, convergence between the two is possible as scale grows.
As of September, the stablecoin market capitalization stood at about $300 billion, reflecting a 75% increase year over year. Citi has raised its 2030 issuance forecasts to $1.9 trillion for its base case and $4 trillion for a bull case scenario.
Regulatory clarity is attracting traditional finance players into the sector, with banks, neobanks, fintechs, and major payments firms exploring various use cases.
While tokenized deposits and stablecoins are currently complementary, they may compete over time. Banks' fractional-banking model can be more capital-efficient than stablecoins backed on a 1:1 basis.
Financial institutions are also building infrastructure to support other tokenized assets, suggesting the boundary between tokenized deposits and stablecoins is likely to blur in the future.
Currently, JPM Coin is limited to JPMorgan clients, with initial adoption expected among institutions and corporate clients.
