Bernstein, a prominent wealth management firm, has released a groundbreaking report forecasting that the global stablecoin market is poised for an astronomical surge, reaching an estimated $4 trillion by 2035. This audacious projection signals a profound transformation in the financial landscape, heralding what Bernstein terms the "blockchain utility era." The report suggests that stablecoins will evolve into critical financial infrastructure, fundamentally re-architecting payment rails and further integrating traditional finance with the burgeoning crypto economy.

The immediate implications of this forecast are vast, suggesting a future where stablecoins play an indispensable role in cross-border payments, asset tokenization, and institutional treasury management. This projected growth, a massive leap from its current market capitalization (around $220 billion in early 2025), indicates a significant redistribution of capital and a redefinition of how value is transferred and stored globally, impacting everything from bank deposits to the demand for U.S. Treasuries.

The Dawn of the Blockchain Utility Era: Details and Drivers

Bernstein's optimistic outlook for stablecoins is rooted in several key drivers, painting a picture of a structural transformation rather than a speculative bubble. The report emphasizes that regulatory clarity, particularly with the anticipated passage of legislation like the GENIUS Act in the U.S., will be a paramount catalyst. Such regulatory frameworks are expected to instill greater institutional confidence, positioning the U.S. as a dominant force in the institutional crypto market and boosting its share of global institutional activity from 7% to 20% over the next decade.

At the core of this projection is the concept of the "blockchain utility era," where stablecoins, by combining the stability of fiat currency with the efficiency of blockchain technology, become indispensable for various financial applications. They are uniquely positioned to revolutionize cross-border payments and remittances, addressing the inherent inefficiencies, high costs, and delays plaguing the traditional correspondent banking system. Furthermore, the report anticipates that stablecoins will serve as the primary medium for transactions involving the tokenization of real-world assets (RWAs), unleashing digital-native capital markets.

Key players and stakeholders in this evolving ecosystem include stablecoin issuers such as Tether (USDT) and Circle (USDC), whose offerings are expected to see significant expansion. Traditional financial institutions are also increasingly recognizing the potential of digital assets for diversification and yield generation, with stablecoins offering a regulated entry point. The growing demand for U.S. Treasuries, as stablecoin issuers back their tokens with these assets, further intertwines the crypto market with traditional government debt markets. Initial market reactions suggest a growing acceptance and strategic positioning by various entities to capitalize on this anticipated growth, with infrastructure providers and compliant exchanges gearing up for increased institutional adoption.

Companies Poised to Win and Lose in the Stablecoin Surge

The potential for the stablecoin market to swell to $4 trillion by 2035 will undoubtedly create a distinct landscape of winners and losers across the financial and crypto sectors. Companies that strategically embrace and integrate stablecoin technology are poised for significant gains, while those resistant to change may face considerable challenges.

Leading stablecoin issuers stand to be among the primary beneficiaries. Circle (NYSE: CRCL), the issuer of USD Coin (USDC), is a prime example. Having gone public in June 2025, Circle has already demonstrated robust growth, with USDC circulation reaching $73.7 billion by Q3 2025, a 108% year-over-year increase. Its total revenue and reserve income also surged by 66% year-over-year to $740 million. Circle's proactive expansion of partnerships across traditional banking, payments, and digital assets, coupled with a strategic stake from BlackRock (NYSE: BLK), solidifies its position as a regulated category leader. Similarly, PayPal (NASDAQ: PYPL), with its PYUSD stablecoin launched in 2023, is strategically leveraging its vast user base and global payments infrastructure to integrate stablecoins for more efficient and cost-effective international transactions. These issuers will see expanded revenue streams from managing substantial reserves, primarily invested in U.S. Treasuries, and potentially from transaction fees.

Traditional banks face a dual challenge and opportunity. Institutions that adapt and innovate, such as JPMorgan Chase (NYSE: JPM) and Citigroup (NYSE: C), are positioning themselves to thrive. JPMorgan, with its JPM Coin, is actively facilitating instant payments for institutional clients and exploring proprietary deposit coins, viewing stablecoins as fundamental to modernizing cross-border payments and treasury functions. Citi, mirroring this strategy, has partnered with Coinbase (NASDAQ: COIN) to pilot stablecoin payment services. These banks aim to extend traditional banking services onto blockchain infrastructure, maintaining deposits within their systems while offering the benefits of blockchain efficiency. Conversely, traditional banks that fail to integrate stablecoins or offer competitive blockchain-based solutions risk losing market share in payments, remittances, and potentially even lending, as stablecoins offer superior speed, lower costs, and 24/7 availability compared to legacy systems.

Crypto exchanges like Coinbase (NASDAQ: COIN) and Robinhood (NASDAQ: HOOD) are also set to benefit substantially. Increased stablecoin adoption translates directly into higher trading volumes, enhanced liquidity for trading pairs, and greater transaction fee revenues. Coinbase, as a leading exchange and a key participant in the CENTRE Consortium (which governs USDC), plays a crucial role in the stablecoin ecosystem. Robinhood, rated "Outperform" by Bernstein due to its strategy to become a "universal 'Everything Exchange'" leveraging tokenization and its partnership with Circle, is also well-positioned. Stablecoins serve as an essential bridge, reducing price volatility for traders and facilitating efficient cross-border transactions by minimizing the need for frequent fiat conversions. Finally, financial technology (FinTech) companies building the underlying infrastructure and services for stablecoin integration, such as those developing B2B crypto payment platforms or enhancing remittance services, are poised for significant growth, provided they navigate the evolving regulatory landscape effectively.

The Broader Significance: Trends, Regulations, and Historical Parallels

The potential for the stablecoin market to swell to $4 trillion by 2035 signifies not just growth, but a profound re-architecture of the global financial system. This monumental expansion aligns with several overarching industry trends and carries significant ripple effects for competitors, partners, and regulatory bodies, drawing intriguing parallels to historical financial innovations.

At its core, this growth is driven by an escalating demand for price-stable digital assets. Stablecoins offer a crucial bridge between the volatile cryptocurrency markets and the reliability of fiat currencies, making them ideal for trading, remittances, and as a stable store of value, particularly in economies facing currency instability. Their inherent efficiency—offering faster, cheaper, and more streamlined cross-border payments and peer-to-peer transactions—is a compelling factor driving adoption among both businesses and individuals, fundamentally reshaping traditional payment rails. Crucially, the increasing institutional adoption and integration with traditional finance (TradFi) are key; banks are now exploring issuing their own stablecoins or actively collaborating with existing issuers, seeing them as a strategic avenue for capital inflows and a foothold in the future of payments.

The ripple effects will be felt across the financial ecosystem. While stablecoins pose a competitive threat to traditional payment systems, they also compel incumbent players like Visa (NYSE: V) and Mastercard (NYSE: MA) to actively integrate crypto capabilities, as stablecoin transaction volumes begin to rival or even surpass theirs. Traditional banks, if they fail to adapt, risk seeing a significant shift of deposits and liquidity away from their systems, potentially impacting credit availability. However, banks like JPMorgan Chase (NYSE: JPM) and Citigroup (NYSE: C) are actively positioning themselves to manage the reserves and facilitate transactions for this new digital asset class. Furthermore, the rise of stablecoins is intertwined with the growth of decentralized finance (DeFi) and the tokenization of real-world assets (RWAs), providing the stable base currency necessary for these innovative digital-native capital markets to flourish.

From a regulatory standpoint, a $4 trillion stablecoin market necessitates robust and globally coordinated frameworks. As of November 12, 2025, significant strides have been made, with the U.S. passing the "Guiding and Establishing National Innovation for US Stablecoins Act" (GENIUS Act) in July 2025, providing a federal framework for payment stablecoins. Similarly, the EU's Markets in Crypto-Assets (MiCA) regime became operational in 2024. These regulations generally mandate full reserve backing with high-quality liquid assets, clear redemption rights, and robust custody, aiming to mitigate systemic risks such as liquidity runs and contagion effects. However, the sheer scale of stablecoin holdings in U.S. Treasuries could influence market dynamics and monetary policy. There's also the ongoing debate between privately issued stablecoins and Central Bank Digital Currencies (CBDCs), which may compete or complement each other in shaping the future of digital money.

Historically, the evolution of stablecoins draws parallels to past financial innovations. The GENIUS Act's framework, requiring privately issued money backed by government debt, echoes the U.S. National Bank Notes of the 19th century. The offshore circulation of dollar-pegged stablecoins also mirrors the Eurodollar market, which emerged to facilitate efficient global dollar transactions outside domestic banking perimeters. Perhaps the most frequent comparison is with Money Market Funds (MMFs), both aiming for price stability and providing money-like assets. Lessons from MMF "runs" during financial crises serve as a cautionary tale, underscoring the critical need for sound regulation and robust liquidity management for stablecoin issuers to ensure financial stability in this rapidly expanding market.

What Comes Next: Navigating the Future of Digital Finance

The journey towards a $4 trillion stablecoin market by 2035 promises a dynamic and transformative decade, requiring strategic pivots and adaptations from all market participants. As of November 12, 2025, the stablecoin market, currently valued between $255 billion and $290 billion, is poised for explosive growth, driven by increasing institutional adoption, enhanced regulatory clarity, and an expanding array of use cases beyond mere cryptocurrency trading.

In the short term (the next 1-3 years, 2026-2028), the market will likely witness accelerated institutional adoption, largely catalyzed by the regulatory certainty provided by the U.S. GENIUS Act (signed July 2025) and the EU's MiCA regulation (operational mid-2024). Payment giants like Visa (NYSE: V), Mastercard (NYSE: MA), and PayPal (NASDAQ: PYPL) are already accelerating their stablecoin infrastructure development. Stablecoins will increasingly be deployed in cross-border payments and remittances, offering a more efficient and cost-effective alternative to traditional banking. Corporate treasury management will also see greater integration of stablecoins for portfolio diversification, inflation hedging, and yield generation. We may also see the emergence of innovative stablecoin models, such as yield-bearing stablecoins and tokenized real-world assets (RWAs) like short-term U.S. Treasuries, competing with traditional cash management tools. Projections from institutions like J.P. Morgan and Standard Chartered suggest the market could reach $500 billion to $750 billion in the coming years, potentially hitting $1 trillion or even $2 trillion by 2028.

Looking further ahead to 2035, stablecoins are expected to become a foundational layer of global finance. They will be deeply embedded in commerce, supporting tens of trillions in annual transaction activity, serving as the "cash leg" for a vast array of tokenized financial assets. USD-backed stablecoins are predicted to reinforce the U.S. dollar's global dominance in the digital age, acting as "Eurodollar 2.0" and providing seamless access to dollar-denominated assets globally. The "blockchain utility era" will see the acceleration of RWA tokenization, with stablecoins facilitating settlement for these digital-native capital markets. The inherent programmability of stablecoins via smart contracts will unlock new possibilities for automated transactions, embedded compliance, and real-time settlement, leading to a "multi-money" system where stablecoins coexist and interact with commercial bank money and potentially central bank digital currencies (CBDCs).

Strategic pivots will be crucial. Stablecoin issuers must prioritize strict regulatory compliance, transparent reserve management, and robust KYC/AML frameworks, while simultaneously innovating in utility beyond trading. Traditional financial institutions need to accelerate their integration of blockchain technology, acting as custodians, liquidity providers, or even issuers of tokenized deposits, while modernizing their compliance processes. Corporations and businesses will increasingly explore stablecoins for efficient cross-border treasury operations, supply chain finance, and customer-facing payments. Emerging markets present significant opportunities for financial inclusion and reduced remittance costs, but challenges such as regulatory arbitrage, potential dollarization risks, and the competition from CBDCs will demand careful navigation. The ultimate outcome by 2035 could range from a regulated dominance, where stablecoins are a core component of modernized finance, to a more transformative scenario where they profoundly reshape global finance, contingent on effective risk management and continuous innovation.

Wrap-up: A Trillion-Dollar Trajectory and the Future of Money

Bernstein's projection of a $4 trillion stablecoin market by 2035 is more than just an ambitious forecast; it's a blueprint for a fundamentally re-architected global financial system. This comprehensive analysis underscores a pivotal shift where stablecoins transition from niche crypto assets to essential, regulated financial instruments, poised to underpin a new "blockchain utility era."

The key takeaways from this trajectory are clear: regulatory clarity, particularly the U.S. GENIUS Act and the EU's MiCA, is the primary catalyst fostering unprecedented institutional adoption. USD-pegged stablecoins are set to reinforce the dollar's global dominance, with Circle's (NYSE: CRCL) USDC identified as a major beneficiary. While their immediate impact on domestic retail payments might be limited, their transformative potential in cross-border payments, remittances, corporate treasury management, and the broader tokenization of real-world assets is immense. As of November 12, 2025, the market is already experiencing significant expansion, with a 50% increase in market capitalization in 2025 alone, driven by global regulatory maturation and mainstream integration by players like Visa (NYSE: V), Mastercard (NYSE: MA), and PayPal (NASDAQ: PYPL).

The lasting significance of this projected growth cannot be overstated. Stablecoins are evolving into a legitimate, regulated component of the financial ecosystem, capable of enabling instant settlements, facilitating cheaper global transactions, and supporting programmable financial services. This transition marks a critical step towards a more interconnected, efficient, and inclusive global financial system, moving beyond speculative cycles to tangible economic functions. Furthermore, the increasing demand for U.S. Treasuries by stablecoin issuers could significantly reshape the multi-trillion-dollar Treasury market itself.

For investors in the coming months, vigilance is key. First, closely monitor the implementation of the GENIUS Act in the U.S., the full enforcement of MiCA in the EU, and other emerging regulatory frameworks globally. Consistency and robust enforcement will dictate market stability. Second, observe institutional adoption: further partnerships and integrations between major financial institutions and stablecoin issuers will signal real-world utility. Third, scrutinize reserve transparency; prioritize issuers that maintain 100% reserves in highly liquid assets and provide frequent, audited public reporting to mitigate risk. Fourth, evaluate expanded use cases beyond trading, looking for stablecoins' increasing role in cross-border payments, remittances, and corporate treasury management, as these signify a shift towards fundamental financial infrastructure. While USD-pegged stablecoins dominate, consider the potential emergence of stablecoins pegged to other major global currencies for diversification. Remember that stablecoins are designed for price stability, not capital appreciation; treat them as efficient working capital or for yield generation in DeFi. For capital growth, consider investing in publicly traded companies positioned to benefit from stablecoin adoption, such as Circle (NYSE: CRCL), Coinbase (NASDAQ: COIN), or Robinhood (NASDAQ: HOOD). Finally, if utilizing stablecoins for yield in DeFi, thoroughly research underlying protocols and associated risks.

The coming months are crucial for the stablecoin market as regulatory frameworks solidify and institutional integrations deepen. Informed and cautious investors will be best positioned to navigate this rapidly evolving segment of digital finance.

This content is intended for informational purposes only and is not financial advice