JPMorgan: Stablecoins to Boost US Dollar Demand by $1.4 Trillion

Digital dollar-pegged assets set to turbocharge global reserve currency dominance

The Stablecoin Surge

JPMorgan's latest analysis reveals stablecoins are positioning themselves as the killer app for dollar hegemony. These crypto tokens—pegged 1:1 to the US dollar—are creating unprecedented global demand for greenback exposure without the traditional banking overhead.

Global Dollarization 2.0

Move over SWIFT. Stablecoins bypass legacy financial infrastructure while simultaneously amplifying dollar usage across emerging markets and decentralized finance protocols. The $1.4 trillion projection represents conservative estimates of capital flowing into dollar-backed digital assets over the next cycle.

Wall Street's Crypto Conversion

Traditional finance giants finally acknowledge what crypto natives knew years ago—digital dollars move faster, cheaper, and across more borders than their paper counterparts. Though watching banks embrace the technology they once dismissed does bring a certain irony to the party.

The final frontier? Watching legacy institutions race to claim credit for the very innovation they tried to regulate into oblivion. Some things never change in finance—except now the paperwork's digital.

Although there has been an increase in the number tokens backed by other fiat-currencies, such as the ruble-backed A7A5 and Circle’s euro-pegged EURC (EURC), none have managed to surpass the domination of USD-backed tokens.

According to data from CoinGecko, USD tokens make up more than $300 billion of the $304 billion-valued market cap. This means that more than 90% of these assets are backed by the U.S dollar in some shape or form. In fact, Tether’s own dollar-backed USDT (USDT) alone currently contributes to nearly 60% of the total market cap.

“Given that [about] 99% of the total stablecoin supply is pegged 1:1 to the dollar, stablecoin market growth necessarily implies some demand for the dollar,” said the bank.

What is fueling the stablecoin market?

According to JPMorgan, the stablecoin market could grow to reach $2 trillion in the next few years. This marks a $1.7 trillion jump from its current value at $304 billion. While such a massive leap may seem difficult to imagine, the past year has shown promising growth in financial adoption worldwide.

Just a week prior, the market surpassed $300 billion for the first time in history. In just five years, the industry has grown from a meager $4 billion to more than $300 billion in market cap. In 2025 alone, the market has received a $100 billion boost from investors eager to take part in the fairly new financial technology.

The emergence of global regulations that facilitate stablecoin usage has also played a major role in accelerating mainstream adoption. The United States government passing the GENIUS Act became a stepping stone that accelerated the growth of dollar-backed tokens.

Outside of the U.S, Hong Kong’s Stablecoin Ordinance became the catalyst that set off a frenzy of firms eager to acquire a license in order to issue their own tokens pegged to local currencies. In the EU, banks have grown increasingly eager to launch their own euro-backed tokens, with the goal of challenging the U.S dollar’s dominance over the market.