The "GPT Moment" of stablecoins: Large-scale application of Blockchain in the financial and public sectors

1. Why is the large-scale adoption of Blockchain happening now?

2025 may become the "ChatGPT moment" for the application of Blockchain in the financial and public sectors. The main reasons include:

• The supportive stance of US regulatory agencies towards Blockchain is expected to be a year that changes the landscape of the industry. This could lead to broader adoption of blockchain-based coins and stimulate the emergence of other use cases in the financial and other sectors in both the private and public sectors in the US.

• Another potential catalyst is the ongoing focus on the transparency and accountability of public spending.

These changes are based on developments over the past 12-15 months, including the EU's regulatory market for crypto assets ( MiCA ), the growth in user demand reflected by the issuance of cryptocurrency ETFs, the institutionalization of cryptocurrency trading and custody, and the US government's establishment of a strategic Bitcoin reserve.

The government's adoption of Blockchain is divided into two categories: empowering new financial tools and system modernization. The system is upgraded by integrating shared ledgers to enhance data synchronization, transparency, and efficiency.

1.1 stablecoin is on the rise

Stablecoins are cryptocurrencies linked to stable assets such as the US dollar (, and a key catalyst for their broader acceptance may be the clarity of US regulation. This could allow stablecoins and Blockchain ) to better integrate into the existing financial system from a broader perspective.

Given the dominant position of the US dollar in international finance, changes to stablecoins in the United States will affect the broader global system.

The U.S. government seems eager to promote the development of the onshore digital asset industry, which is one of its key focuses for enhancing innovation and efficiency. In January 2025, an executive order by the U.S. President titled "Strengthening America's Leadership in Digital Financial Technologies" established a digital asset working group responsible for developing a federal regulatory framework for the industry.

Against a backdrop of regulatory friendliness, digital assets are increasingly integrating with existing financial institutions, laying the foundation for the growth in use of stablecoins. Macroeconomic factors such as the demand for the US dollar in emerging and frontier markets further support this trend.

According to DefiLlama data, by the end of March 2025, the total value of stablecoins will exceed $230 billion, which is 30 times that of five years ago. This reflects, to some extent, the increase in the total value of cryptocurrencies, which grew by 1400% from March 2025 over the five years, as well as the growth in institutional demand. Our analysis indicates that, in the baseline scenario, the total supply of stablecoins could reach $1.6 trillion, with bear and bull market scenarios reaching approximately $0.5 trillion to $3.7 trillion, respectively.

Demand for US Treasury Bonds: Establishing a regulatory framework for US stablecoins will support the demand for risk-free US dollar assets both domestically and internationally. Stablecoin issuers must purchase US Treasury Bonds or similar low-risk assets as a measure of their holding secure collateral. In the baseline scenario, we expect the amount of US Treasury Bonds purchased to exceed $1 trillion. By 2030, the amount of US Treasury Bonds held by stablecoin issuers could surpass the total amount of any current jurisdiction.

( 1.2 Future Challenges

The development of stablecoins also faces resistance and challenges. Although the dominance of the US dollar may evolve over time, the euro or other currencies may be driven by regulations in various countries, many non-US policymakers may view stablecoins as a tool of dollar hegemony.

The geopolitical situation remains turbulent. If the world continues to move towards a multipolar system, policymakers in China and Europe are likely to be keen on promoting central bank digital currencies ) CBDC ( or stablecoins issued in their national currencies. Policymakers in emerging and frontier markets will also remain vigilant about the local risks brought by dollarization.

Therefore, we expect that the stablecoin market will still be dominated by the US dollar in the coming years. In the baseline scenario, we anticipate that by 2030, approximately 90% of the stablecoin supply will be denominated in US dollars, although this is lower than the current nearly 100%.

Stablecoins carry the risk of a bank run and may trigger spillover effects. In 2023, stablecoins decoupled approximately 1,900 times, with about 600 of those being large stablecoins. Large-scale decoupling events may suppress liquidity in the cryptocurrency market, trigger automatic liquidations, weaken the redemption ability of trading platforms, and potentially have broader spillover effects on the financial system. For example, in March 2023, the news of Silicon Valley Bank's collapse triggered a massive redemption of USDC.

) Do public sectors need Blockchain?

Trust and transparency are crucial for maintaining public support for governments and institutions.

Blockchain introduces a trust-based decentralized public sector data management method. In traditional systems, trust stems from authoritative institutions—such as the government verifying its own records—while blockchain allows for cryptographic proof of authenticity. Trust is rooted in the technology itself.

The immutability of the Blockchain ensures that information, once recorded, cannot be altered, thus providing tamper-proof records for sensitive public data ###, such as land registries, voting systems, and financial transactions (. Although other technologies can also achieve immutability, they often require trusted parties to enforce it.

Cross-border activities, especially those involving the payment of international funds through institutions like the World Bank or humanitarian aid projects, are important use cases for Blockchain. The flow of international funds can be opaque, making it difficult to effectively verify whether resources reach their intended recipients. Blockchain can provide transparency for complex transactions, even in remote or unstable areas where financial institutions may not operate smoothly.

2. The GPT Moment of Stablecoins

) How do stablecoins work?

A stablecoin is a type of cryptocurrency designed to stabilize its value by pegging its market value to underlying assets. The underlying assets can be fiat currencies like the US dollar ###, commodities such as gold (, or a basket of financial instruments.

Key components of the stablecoin ecosystem include:

• Stablecoin issuer: An entity that issues stablecoins and is responsible for managing the underlying assets, typically holding a value equivalent to the circulating supply of stablecoins in the underlying assets.

• Blockchain ledger: After stablecoins are issued to the public, transactions will be recorded on the blockchain ledger. This ledger provides transparency and security by tracking the ownership and flow of stablecoins among users.

• Reserves and Collateral: Reserves ensure that each token can be redeemed at its pegged value. For fiat-collateralized stablecoins, these reserves typically include cash, short-term government bonds, and other liquid assets.

• Digital wallet providers: Offer digital wallets, which can be mobile applications, hardware devices, or software interfaces, allowing stablecoin holders to store, send, and receive their currency.

![Citigroup 20,000-word report: stablecoin's "GPT moment"])https://img-cdn.gateio.im/webp-social/moments-00b3fbca0224a60bd7c674e4dae34fa0.webp###

( 2.2 Factors Driving the Adoption of Stablecoins

The channel factors of stablecoin are as follows:

• The practical advantages of stablecoins ) include fast speed, low cost, and 24/7 availability. ( This is creating demand in developed and emerging economies.

• Macroeconomic demand ) inflation hedging, financial inclusion ( is driving the adoption of stablecoins in regions experiencing severe inflation.

• The recognition and integration of existing banks and payment providers is key to the legitimization of stablecoins ), especially for institutional and corporate users ###, and can rapidly expand their usage and applicability.

• The long-awaited regulatory clarity will allow banks and the broader financial services industry to introduce stablecoins in both retail and wholesale sectors.

• User Experience: The global payment landscape is increasingly shifting towards real-time digital transactions. Any institution that successfully enhances customer experience—whether for retail users or institutional users—will stand out in their respective fields and become a leader.

• Innovation and Efficiency: Institutions must view stablecoins as a driving force for more agile product development, which is difficult to achieve in today's era. This means providing a simpler, more creative, or more attractive medium to enhance traditional bank deposits in the form of, for example, yield generation, programmability, and composability.

( 2.3 The Potential Market for stablecoins

We have built the forecast range based on the growth of stablecoin demand driven by the following factors:

• Convert part of the USD holdings both domestically in the US and abroad from cash to stablecoin.

• Reallocate some of the short-term liquidity of dollars held by U.S. and international households and businesses into stablecoins to support cash management and payment operations.

• The growth of the public crypto market, where stablecoins are used as facilitators for settlement or currency acceptance; partly due to the increasing adoption rate of public crypto assets by institutions and the widespread use of Blockchain technology.

We estimate the baseline scenario for the stablecoin market size in 2030 to be $1.6 trillion, the optimistic scenario to be $3.7 trillion, and the pessimistic scenario to be $0.5 trillion.

![Citigroup 20,000-word research report: stablecoin's "GPT moment"])https://img-cdn.gateio.im/webp-social/moments-68f042e830eff44b92eb02668568d9c1.webp(

) 2.4 stablecoin market outlook and use cases

The most optimistic prediction is that as stablecoins become the daily medium for global instant, low-cost, low-friction transactions, the market size will expand by 5-10 times. The relatively optimistic prediction is that by 2030, the value of stablecoins will grow exponentially from the current approximately $200 billion to $1.5 trillion - $2.0 trillion, and will penetrate into global trade payments, P2P remittances, and mainstream banking.

This optimistic sentiment relies on several key assumptions:

• Regulatory policies are relaxed in key regions
• Establishing genuine trust between existing banks and new entrants, as well as widespread trust from consumers and businesses in the integrity of stablecoin reserves.
• Reasonable income distribution throughout the value chain to promote cooperation.
• Widely adopted technologies that can connect new and old infrastructure, thereby promoting structural efficiency and scalability.

In a pessimistic scenario, the use of stablecoins is still limited to the crypto ecosystem and specific cross-border use cases. In this case, the market capitalization of stablecoins may stabilize between 300 billion and 500 billion dollars, with a limited role in the mainstream economy.

The main use cases of stablecoins currently and in the future include:

1. Cryptocurrency trading: accounts for 90%~95% of stablecoin trading volume.

2. B2B Payment ( Enterprise Payment ): may account for 20%~25% of the total market size of stablecoins.

3. Consumer remittances: may account for 10%~20% of the market share.

4. Institutional trading and capital markets: may occupy about 10% to 15% of the stablecoin market.

5. Interbank liquidity and funds: may be less than 10% of the total market size.

![Citigroup 20,000-word research report: stablecoin's "GPT moment"]###https://img-cdn.gateio.im/webp-social/moments-9eaf4e31a48573f3475d85b309ce79a2.webp(

) 2.5 stablecoin: bank card, central bank digital currency ### CBDC ( and strategic autonomy

Just like the evolution of the bank card market over the past 10 to 15 years, the stablecoin market will also undergo changes. Stablecoins share some similarities with the bank card industry or cross-border banking. All these industries possess strong network/platform effects and powerful reinforcement cycles.

However, the continuous development of politics and technology has led to an increasing disparity in the credit card market ), especially in areas outside the United States (. Will the same situation also occur with stablecoins?

Many countries have developed their own national card programs, such as Brazil's Elo)2.