The stablecoin market is expected to grow exponentially over the next 5 years, according to experts in the France-based fintech company, Next Generation.
Growth will take place in all aspects, ranging from market capitalization to investment volumes.
The company believes that by the year 2029 stablecoins will become the dominant settlement and payment instrument and their total market capitalization will exceed $3.4T.
“2024 has become a turning point for the entire fintech industry, and for stablecoins in particular. Major growth drivers have been determined in the current year, and for at least the next 5 year period,” said the president of Next Generation, Suren Hayriyan, adding, “It is 2024 when the financial sector realised that the technological centre of gravity of its development will increasingly move towards blockchain. Blockchain is the only technology that provides the maximum possible transaction speed, universal accessibility as well as the lowest costs.”
This year has become a springboard for stablecoins’ further development. The segment has reached a new milestone, with total market capitalization setting a new all-time high record. This achievement is driven by a combination of revolutionizing technologies, regulatory clarity, and soaring institutional adoption.
The demand for stablecoins has been reaching new heights and will continue to escalate.
“The locomotive of growth will be EURO-coins. The reason is a significant impetus that MiCA gave to the EURO-pegged stablecoins in 2024. In addition, the demand for EURO-coins will be exceeding supply due to a strong gap between trading volumes of the fiat currency and EURO-coins over the next 5 years. The segment’s current potential exceeds 99 percent,” said Hayriyan.
According to Next Generation, the market capitalization of the EURO-pegged stablecoins will exceed $25B by 2028, and $50B by 2029, against $400M currently.
While in 2024 the release of new stablecoins is more of an isolated case, typical for large financial institutions, in 2026 the launch of their own stablecoins will be a routine phenomenon for large banks or sizeable fintech companies. It will still remain an isolated event for specialized fintech players of average or small sizes.
He went on to say that by the end of 2028, many large financial institutions will have several stablecoins in different currencies in their portfolios. “At the same time, having stablecoins will become an attribute of almost all large payment companies, like payment orchestrators and facilitators. Many of them will operate more than one stablecoin, in different currencies, which will also be due to the demand for multi-currency features in international settlements,” Hayriyan said.
The market may reach saturation in 2029. Competition for this product will become overheated.
By 2026, Next Generation expects two more stimulating factors to become effective. According to the company's calculations, in 2026 there will be a jump in web3 initiatives, and fintechs will compete in stepping up the use of AI in all their products, including stablecoins. In 2026, stablecoins will become important instruments not only for crypto-fiat settlements, but also as ordinary digital currency for direct intercompany treasury management and p2p settlements, as well as providing options for savings and remittances.
This will in turn stimulate participants to push the market to new levels of digitalization penetration.
As the demand keeps growing, in 2024 we can expect the stablecoin to reach $180B, and to increase to $900B in 2025. In 2026, the segment will likely demonstrate a 1.5T market cap, and in 2027, the level of $1.9T. $2.7T is quite realistic as an anticipated result by the end of 2028.
Along with market capitalisation, the next few years will demonstrate a spectacular growth in investments in stablecoin launching projects. Currently, according to our estimates, companies invest more than $500M per annum in the industry. By the end of 2025, we can expect investment to grow to $3B per annum, and in 2026 to $5B. In 2027 and 2028, investors will likely invest $7B and $9B respectively, and in 2029, up to $12B.
In the near future, significant changes will occur in the structure of stablecoin transactions. Regulatory clarity and increasing regulation-related stability and predictability will rapidly increase the use of stablecoins by financial institutions. While the overwhelming majority of transactions are p2p nowadays, in 2026, institutional stablecoin transactions will account for 60 percent of the volume, and in 2029, more than 90 percent, Next Generation believes.