Citigroup: Blockchain technology may迎来 a wave of applications similar to the "ChatGPT moment".

Source: Cointelegraph Original text: "Citigroup: Blockchain technology may usher in an application wave similar to the 'ChatGPT moment'"

Investment banking giant Citigroup stated that regulatory changes could become a catalyst for the widespread adoption of stablecoins and blockchain technology by 2025.

The financial analyst team of Citigroup pointed out in a report on April 23: "Driven by regulatory changes, 2025 is expected to become the 'ChatGPT moment' for the application of blockchain in the financial and public sectors."

Driven by increasing regulatory support and greater adoption by financial institutions, the market capitalization of stablecoins is expected to reach a high of $3.7 trillion by 2030, with a baseline scenario of $1.6 trillion.

Citigroup stated in the report: "The clarification of U.S. regulatory policies may become a major catalyst for increasing the acceptance of stablecoins, which will drive the broader integration of stablecoins, particularly blockchain technology, into the existing financial system."

"The favorable factors of regulatory support and the deep integration of digital assets in traditional financial institutions are creating favorable conditions for the growth of stablecoin usage."

After the Trump administration came to power earlier this year, it adopted a friendly attitude towards cryptocurrencies. Members of Congress are weighing stablecoin legislation, including the GENIUS Act, which aims to regulate stablecoins in the United States and ensure their legitimate use in the payment sector.

According to the report, the establishment of a regulatory framework for stablecoins in the United States will also support the demand for risk-free dollar assets both domestically and internationally.

Citibank stated: "Stablecoin issuers must purchase U.S. Treasury bonds or similar low-risk assets as the secure underlying collateral for each stablecoin."

"By 2030, the scale of U.S. Treasury bonds held by stablecoin issuers could exceed that of any single jurisdiction currently."

Citi predicts that the future supply of stablecoins will continue to be denominated in US dollars, while non-US countries may promote their own currencies or central bank digital currencies (CBDCs).

In April, the market value of stablecoins has exceeded $230 billion, a 54% increase compared to last year, with Tether (USDT) and USDC accounting for 90% of the market share.

Citigroup pointed out: "Although the dominance of the US dollar may evolve over time, and the euro or other currencies may be driven by national regulations, many non-US policymakers may view stablecoins as tools of dollar hegemony."

"The geopolitical situation remains fluid. If the world continues to move towards multipolarity, policymakers in China and Europe may actively promote central bank digital currencies (CBDC) or stablecoins issued in local currencies."

However, the market still faces some challenges. If "the challenges of adoption and integration persist", the market capitalization of stablecoins may stabilize around $500 billion.

According to data from Citigroup, de-pegging has also been flagged as a potential issue. In 2023, there were 1,900 instances of de-pegging, including the significant de-pegging event of USDC after the collapse of Silicon Valley Bank.

The institution stated: "Significant decoupling events may suppress liquidity in the crypto market, trigger automatic liquidations, impair the ability of trading platforms to meet redemption requests, and potentially have broader contagion effects on the financial system."

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