Wall Street Bank Citi Sees Stablecoins Powering Crypto’s Next Growth Phase

Why It Matters

Citi warns effects on bank deposits should be modest but funding costs and lending appetites could shift, while growing use of dollar‑backed coins in emerging markets may spur policy responses to limit “dollarization.

Summary

Citi says stablecoins are set to power crypto’s next growth phase, noting they have risen alongside the market after the GENIUS Act and prompting the bank to lift its 2030 digital‑asset market‑cap outlook to $1.9 trillion. The bank finds stablecoins remain primarily an on‑ramp—consistently 5%–10% of crypto market cap—and have revived activity on Ethereum even as issuer‑specific networks and euro‑denominated coins begin to challenge dollar dominance. Citi warns effects on bank deposits should be modest but funding costs and lending appetites could shift, while growing use of dollar‑backed coins in emerging markets may spur policy responses to limit “dollarization.”