The Block reported on May 1, 2026 on JPMorgan's research, which draws on the bank's reports from July and December 2025. The analysis is rooted in monetary velocity: the rate at which a unit of currency circulates through the economy.

As stablecoins see wider adoption in payments and settlements, each token changes hands more frequently, meaning the same pool of supply can support a far larger volume of economic activity. On this reading, market cap figures may increasingly understate real-world utility, a conclusion that follows logically from JPMorgan's own model even if the bank does not state it in those terms.

The Velocity Argument

Velocity is calculated by dividing total transfer volume by outstanding supply. JPMorgan estimates that USDT's annual velocity on Ethereum runs at roughly 50 times, meaning a single token effectively does the work of 50 tokens used only once. By that logic, a $200 billion stablecoin float could theoretically process around $10 trillion in annual cross-border payments, which represents approximately 5% of global flows, without requiring any additional issuance.

This framing sits behind JPMorgan's comparatively conservative market cap forecast of $500 billion to $600 billion by 2028. That figure stands in sharp contrast to projections from Citi ($1.9 trillion base case, $4 trillion bull case by 2030) and Standard Chartered ($2 trillion by end-2028). Standard Chartered's $2 trillion projection was issued in April 2025, conditional on the GENIUS Act passing. Since the Act was signed into law in July 2025, that condition has been met, which arguably makes the Standard Chartered figure more credible now than when it was issued.

The gap between those estimates reflects fundamentally different assumptions about how much of the future stablecoin economy will be driven by passive holding versus active circulation. A third variable complicates that binary: yield-bearing stablecoins, which blur the line between passive and active use by generating returns for holders while remaining available for circulation.

Nikolaos Panigirtzoglou, JPMorgan's Managing Director and Lead Digital Assets Strategist, noted in December 2025 that the vast majority of current stablecoin demand comes from crypto-native activity: trading, derivatives, and DeFi lending and borrowing. According to JPMorgan data reported by CoinDesk in July 2025, payments account for only 6% of stablecoin use, while roughly 88% of demand is crypto-native. That gap underscores how far the technology still sits from mainstream payment adoption.

What the On-Chain Numbers Show

Q1 2026 data from Stablecoin Insider adds texture to this debate. Total stablecoin market cap reached $315 billion by the end of the quarter, up roughly $100 billion over the past year. Transaction volume hit $28 trillion for the quarter, a 51% jump from Q4 2025 and an all-time high.

However, 76% of that volume was bot-generated, the highest share in two years, which complicates straightforward interpretations of growth. Stripping out automated activity reveals a more nuanced picture: USDC's organic volume grew 59% quarter-over-quarter and captured approximately 80% of non-bot activity, a sign that real human use is concentrating in the dollar-coin market's second-largest token.

On the supply side, USDT declined by about $3 billion to $184 billion, while USDC gained roughly $2 billion to reach $78 billion. Together they hold around 93% of the total stablecoin market.

Yield-bearing stablecoins, products that pay holders a return similar to a money market fund, grew 22% in the quarter and contributed more than half of net supply growth. Under the GENIUS Act, these products sit in a distinct regulatory category from payment stablecoins, which the Act defines as non-yield-bearing. How regulators treat that distinction will matter for how yield-bearing products scale.

Visa's Economic Empowerment Institute measured overall stablecoin velocity at 13.56 times in Q4 2025, far above the 1.65 times velocity of traditional M1 money supply. But retail-scale transactions, those under $250, showed a velocity of just 0.08 times. The bulk of high-speed circulation is still institutional and financial rather than consumer payments.

Nigeria and India Are Already Living the Velocity Model

JPMorgan's skepticism about consumer payments adoption is largely framed around developed markets. Teresa Ho, the bank's head of U.S. Short Duration Strategy, was direct in remarks sourced to JPMorgan Global Research: "I just really don't see folks going to Starbucks and say, 'I want to pay their coffees with stablecoins.'"

It is worth noting alongside those conservative public forecasts that JPMorgan itself operates an institutional stablecoin pilot called JPMD. The bank's pragmatic engagement with the technology sits in tension with its bearish headline numbers, a tension that colors how its analysis should be read.

That skepticism about everyday payments also misses where stablecoin adoption is already scaling. In Nigeria, 87% of crypto users have recently transacted with stablecoins, the highest rate globally according to BVNK's 2026 Stablecoin Utility Report. Sub-Saharan Africa recorded 180% year-over-year growth in stablecoin adoption. The dominant use cases are cross-border remittances, savings in dollar-denominated assets as local currencies depreciate, and merchant settlement. Nigeria ranked second in the 2026 Global Crypto Adoption Index.

India ranked first in the same index, driven largely by freelance income transfers and inbound remittances. The adoption story there is complicated by an unusually heavy tax environment: a 30% levy on crypto gains and a 1% tax deducted at source on transactions have pushed some activity off-chain or offshore, meaning on-chain velocity data for India may undercount real usage by a meaningful margin. That dynamic is directly relevant to JPMorgan's velocity-based framework, since suppressed on-chain activity would cause the model to understate the country's actual economic engagement with stablecoins.

Here is the counterintuitive implication of JPMorgan's own model: African and South Asian users who transact in stablecoins daily are driving velocity higher. Per JPMorgan's framework, that means these regions are generating substantial economic utility without requiring large increases in total supply. In the analysis offered here, market cap figures would systematically undercount the real impact of stablecoin use in these markets.

What Comes Next

The regulatory picture will shape how this plays out. The GENIUS Act, signed into US law in July 2025, created the first federal framework for payment stablecoins and mandated full AML and sanctions compliance rules by July 2026. Treasury proposed those rules in April 2026, with a public comment period closing June 9, 2026. That deadline may shift: major US banks have already lobbied for extensions, introducing uncertainty into a timeline that directly affects users in Lagos, Mumbai, and Johannesburg, not just New York. Because USDT and USDC together dominate the global market, compliance requirements will reach well beyond US borders regardless of when they take effect.

Builder Note. For teams working on stablecoin applications, the velocity argument carries a practical signal. Products that drive transaction frequency, including payroll disbursements, recurring remittances, and micro-merchant rails, generate more on-chain value per unit of supply than passive custody tools. In a market where supply growth may disappoint headline forecasts, circulation efficiency is the metric worth optimizing.