August 20, 2025 – Goldman Sachs released a research report predicting a “stablecoin gold rush” that could transform the $271 billion market into a multi-trillion dollar industry.
The report cites new U.S. regulations and untapped payment market opportunities as primary growth drivers.
Key Takeaways
USDC projected to grow 40% annually through 2027, adding $77 billion in market value according to Goldman Sachs research$240 trillion global payment market identified as main growth opportunity, with most stablecoin activity currently limited to crypto tradingGENIUS Act passed by U.S. Senate 68-30, establishing federal framework requiring 1:1 dollar backing for stablecoinsTreasury Secretary Bessent predicts $2 trillion stablecoin market, expects increased demand for U.S. government bondsMajor banks entering the market including JPMorgan, BNY Mellon, and Standard Chartered developing digital payment solutions
Current Market Analysis
Market Size and Growth Metrics
The stablecoin market stands at $271 billion globally, with Circle’s USDC experiencing 78% year-over-year circulation growth.
Goldman Sachs research team, led by Will Nance, projects USDC will add $77 billion in value with a 40% compound annual growth rate (CAGR) through 2027.
Tether’s USDT maintains market dominance with 67% share ($143 billion market cap) compared to USDC’s 27% share ($62 billion).
Despite Tether’s larger size, USDC’s growth rate significantly outpaces its competitor.
Institutional Interest Surge
Jeremy Allaire, Circle’s CEO, reported during Q2 2025 earnings: “Since our IPO and since the GENIUS Act passed, the number of major financial institutions engaging with us in banking, payments, capital markets [and] so many categories has surged.”
Circle’s USDC now reaches over 500 million users across 180+ countries through digital wallets and consumer applications.
The company has processed more than $850 billion in fiat-to-blockchain transactions since 2018.
The $240 Trillion Opportunity
Payment Market Breakdown
Goldman Sachs identifies the global payments market as the primary growth catalyst, citing Visa’s market assessment:
Consumer payments: ~$40 trillion annuallyB2B payments: ~$60 billionP2P payments and disbursements: Remainder of $240 trillion total
The report emphasizes this opportunity remains “largely untapped,” with current stablecoin usage primarily confined to cryptocurrency trading rather than mainstream payments.
Real-World Implementation
Companies already integrating stablecoins for payments include:
Visa: Expanded USDC settlement pilot for cross-border merchant paymentsStripe: Acquired Bridge for $1.1 billion to enable USDC payoutsMoneyGram: Integrated USDC for international remittancesRevolut: Uses stablecoins to eliminate 1-3% foreign exchange fees
Regulatory Framework Takes Shape
GENIUS Act Details
The GENIUS Act passed the U.S. Senate on June 17, 2025, with bipartisan support (68-30 vote).
Key provisions include:
Mandatory licensing for all stablecoin issuers1:1 backing requirement with U.S. dollars or TreasuriesFederal oversight for issuers above $10 billion in circulationState regulatory options for smaller issuersMonthly audited reports on reserve compositionCriminal penalties for false information
For comparison, the House is considering the 2025 STABLE Act, which differs in consumer protection provisions and state regulatory authority.
Global Regulatory Landscape
Different jurisdictions are implementing varied approaches as detailed in our 2025 stablecoin regulations guide:
European Union: MiCA regulation led to USDT delisting from major exchangesUnited Kingdom: Developing framework under Financial Services and Markets Act 2023Hong Kong: Enacted strict requirements via Stablecoins Ordinance (August 2025)
Treasury Market Impact
Bond Demand Projections
U.S. Treasury Secretary Scott Bessent predicts stablecoins could reach $2 trillion, stating: “This groundbreaking technology will buttress the dollar’s status as the global reserve currency and lead to a surge in demand for US Treasuries.”
Bank for International Settlements research shows:
Large stablecoin inflows lower 3-month Treasury yields by 2-2.5 basis pointsOutflows raise yields by 2-3 times more than inflows lower them
Skeptical Views
UBS economist Paul Donovan argues: “Stablecoins are more about redistributing money supply. Someone selling Treasury bills to buy stablecoins, which invest the money in Treasury bills does not change demand for US debt instruments.”
Market Predictions Comparison
Institutional Forecasts
Financial institutions offer varying growth projections:
Bullish Projections:
Conservative View:
JPMorgan: $500 billion by 2028, calls trillion-dollar forecasts “far too optimistic”
JPMorgan notes that 88% of current stablecoin demand comes from crypto-native activity rather than mainstream payments.
Banking Sector Response
Traditional Banks Enter Market
Major financial institutions are developing stablecoin strategies, as covered in our bank-issued stablecoins guide:
Technology Integration
Goldman Sachs and BNY Mellon announced institutional investors can purchase tokenized money market funds on Goldman’s blockchain platform, with participation from BlackRock, Fidelity, and Federated Hermes.
Practical Applications
Current Use Cases
Beyond trading, stablecoins are gaining traction in:
Cross-border payments: Reducing transaction costs from 1-3% to minimal feesB2B settlements: Eliminating intermediaries and reducing settlement timesTreasury management: Providing 24/7 liquidity for corporate operationsFinancial inclusion: Serving unbanked populations in 180+ countries
For users interested in getting started, see our guide on adding USDC to MetaMask across multiple networks.
Infrastructure Development
Circle has expanded USDC to 23 blockchain networks including:
Market Dynamics
Competition Analysis
The stablecoin market shows clear segmentation:
Market Leaders:
Emerging Players:
Euro-backed stablecoins (EURC, EURI) gaining traction under MiCAYield-bearing models like Ethena’s USDe ($5 billion market cap)Bank-issued tokens from traditional financial institutions
Revenue Models
Understanding how Circle generates yield on USDC reserves becomes important as interest rates affect profitability.
Circle reported $1.7 billion in 2024 revenue, primarily from interest on reserve assets.
Future Outlook
Near-Term Developments
The stablecoin market faces several catalysts in coming months:
House vote on STABLE Act expected before August 2025 recessFirst GENIUS Act licenses anticipated by Q4 2025Major bank stablecoin launches following regulatory clarityCross-border payment adoption by Fortune 500 companies
Long-Term Implications
Goldman Sachs trillion-dollar prediction reflects fundamental shifts in global finance:
Payment infrastructure modernization replacing correspondent bankingDollar accessibility expansion to emerging marketsTreasury market transformation with new demand sourcesBanking business model adaptation to blockchain-based systems
Conclusion
Goldman Sachs trillion-dollar prediction signals a fundamental shift in global finance.
With the GENIUS Act providing regulatory clarity, major banks launching digital currencies, and a $240 trillion payment market ready for disruption, stablecoins are moving from the margins to the mainstream.
Whether the market reaches JPMorgan’s conservative $500 billion or Treasury Secretary Bessent’s $2 trillion target, the trajectory is clear: stablecoins are becoming critical infrastructure for payments, treasury management, and cross-border transactions.
For financial institutions and businesses operating globally, adapting to this transformation isn’t optional, it’s essential for staying competitive.
For ongoing coverage of market developments and regulatory updates, stay tuned for the latest stablecoin news and analysis.
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FAQs:
1. What is Goldman Sachs specific prediction for stablecoin market growth?
Goldman Sachs predicts USDC will grow at 40% CAGR through 2027, adding $77 billion in value. The bank identifies a $240 trillion payment market opportunity that could drive multi-trillion dollar stablecoin adoption.
2. How does the GENIUS Act affect stablecoin operations?
The GENIUS Act requires stablecoin issuers to obtain licenses, maintain 1:1 dollar backing, submit monthly audited reports, and face federal oversight if circulation exceeds $10 billion. It passed the Senate 68-30 on June 17, 2025.
3. Which major banks are entering the stablecoin market?
JPMorgan Chase launched JPM Coin and JPMD, BNY Mellon partnered with Goldman Sachs for tokenized funds, and Standard Chartered is developing stablecoins. At least ten major banks have launched or announced stablecoin initiatives.
4. What are the main differences between market forecasts?
Goldman Sachs and Standard Chartered predict trillion-dollar markets within 3-5 years, while JPMorgan forecasts $500 billion by 2028. The difference stems from assumptions about payment adoption versus crypto trading usage.
5. How do stablecoins impact U.S. Treasury markets?
Stablecoins must back reserves with dollars or Treasuries, creating demand for government bonds. BIS research shows large inflows can lower 3-month yields by 2-2.5 basis points, though some economists argue this merely redistributes existing demand.