J.P. Morgan Revises Stablecoin Growth Forecast, Cuts Projections by Half

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J.P. Morgan has lowered its forecast for the stablecoin market, predicting growth to reach only $500 billion by 2028—half the size projected by some analysts. The investment bank called trillion-dollar estimates “far too optimistic,” citing limited mainstream adoption of dollar-pegged stablecoins beyond crypto trading.

While stablecoins have attracted fintechs and banks seeking faster payments and settlements, their actual use in everyday transactions remains minimal. J.P. Morgan estimates that stablecoin payments account for just 6% of demand, roughly $15 billion, with the majority of activity concentrated in crypto trading, decentralized finance, and collateral usage.

This cautious outlook contrasts sharply with earlier projections from Standard Chartered, which expected the market to grow to $2 trillion by 2028, and Bernstein, which forecasted a $4 trillion market over the next decade.

J.P. Morgan noted several challenges limiting stablecoin adoption outside crypto markets, including a lack of broad use cases, fragmented regulation, and the global focus on national digital currencies or improvements to existing payment systems.

In line with this trend, China’s central bank continues to promote the digital yuan (e-CNY) for international use, while Ant Group—Alibaba’s affiliate—plans to seek a license for stablecoin issuance in Hong Kong. However, J.P. Morgan emphasized that the success of platforms like Alipay and WeChat Pay, or the rise of the e-CNY, do not necessarily predict stablecoin expansion.

“The idea that stablecoins will replace traditional money for everyday use is still far from reality,” the bank said.

Amundi Warns U.S. Stablecoin Policy Risks Destabilizing Global Payment Systems

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Europe’s largest asset manager, Amundi, has expressed concerns over the potential destabilizing effects of the U.S. GENIUS Act, which aims to establish a regulatory framework for U.S. dollar-backed stablecoins. The policy could accelerate the adoption of dollar-pegged cryptocurrencies worldwide, triggering significant shifts in money flows and potentially undermining the global payment system.

The GENIUS Act, passed by the U.S. Senate and expected to be approved soon by the House and President Donald Trump, mandates stablecoins be pegged to the U.S. dollar. JPMorgan estimates that stablecoins in circulation could double to $500 billion in the coming years, with some forecasts reaching $2 trillion. The increase in stablecoin use would drive demand for U.S. Treasury bonds, providing fiscal benefits for the U.S. but raising concerns about weakening the dollar’s international position.

Vincent Mortier, Amundi’s Chief Investment Officer, highlighted that stablecoins might send a message that the dollar is losing strength, especially as over 80% of stablecoin transactions occur outside the U.S. This raises fears about “dollarization,” where foreign economies increasingly depend on the dollar without direct banking ties to the U.S., which could threaten their monetary sovereignty.

European officials have also voiced alarm. Italy’s Finance Minister Giancarlo Giorgetti labeled U.S. stablecoin policies as a greater threat to Europe’s financial stability than trade tensions. Similarly, the Bank for International Settlements warned about stablecoins’ risks to monetary sovereignty, transparency, and the potential for capital flight from emerging markets.

Mortier noted that stablecoins could act like “quasi-banks” as users treat them like deposits redeemable on demand. Their growing use as direct payment methods could further disrupt traditional banking and payment infrastructures, increasing risks to global financial stability.

Though Amundi currently holds no crypto assets, Mortier remains cautious about stablecoins, emphasizing their possible negative consequences on the global payment ecosystem.

Ambiq Micro Files for U.S. IPO Amid Rising Demand for AI-Efficient Chips

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Ambiq Micro, a chip designer based in Austin, Texas, has filed for an initial public offering (IPO) in the United States, reporting a 16.1% increase in net sales for 2024. The company’s growth is being driven by rising demand for semiconductor technology fueled by the surge in generative artificial intelligence (AI) applications.

In its IPO filing, Ambiq Micro disclosed net sales of $76.1 million for 2024, up from $65.5 million the previous year, while narrowing its net loss to $39.7 million from $50.3 million in 2023. The company will list on the New York Stock Exchange under the ticker symbol “AMBQ.” BofA Securities and UBS are serving as the lead underwriters.

Despite strong sales growth and partnerships with major customers like Google and Huawei, the company faces risks due to high customer concentration, relying heavily on a small number of large clients, according to Lukas Muehlbauer, a research associate at IPOX.

Ambiq Micro specializes in ultra-low-power semiconductor solutions aimed at reducing power consumption challenges inherent in general-purpose and AI computing. This positions the company well in the growing market for “AI at the edge” devices, such as wearables, where energy efficiency is critical. Its chips reportedly reduce power use by 2 to 5 times compared to traditional designs, a significant advantage as AI computing typically demands substantial electricity.

The proceeds from the IPO are planned to support general corporate purposes, including working capital, sales and marketing, and product development. The broader IPO market is experiencing a revival, buoyed by strong investor interest in AI-focused technology firms expected to benefit from rapid growth driven by widespread adoption of generative AI.