Will banks move to asset management as money migrates on-chain?

The stablecoin market as of today is worth $313.77 billion, over $7.11 billion has been added to the market over the last 17 days.

This means that the market has had a daily average growth of $418.23 million since 17 days ago, a trend that if sustained could bring the market to nearly half a trillion dollars by Q4 of 2026.

It is also interesting to note that by 2030, the stablecoin market would have surpassed $1 trillion by this growth rate.

This is a figure that many prominent entities and individuals have concluded is achievable by 2030.

Citigroup, for instance, expects the base market growth to $1.9 trillion by 2030, and a bull case of $4 trillion, according to recent reports.

Citigroup says that stablecoins are a catalyst for blockchain’s ChatGPT moment, setting a revised bull case projection of $4.0 trillion by 2030.

In its report, “Stablecoins 2030: Web3 to Wall Street” Citigroup sets base case stablecoin market projection to $1.9 trillion — up from $1.6 trillion — and its bull case projection to $4.0 trillion — up from $3.7 trillion.

The $187.97 billion financial services holding company also says that the stablecoin market could support a velocity in payments similar to Fiat, at $100 trillion for base case and $200 trillion for bull case. – Icoverage Report

$4 trillion as a bull case is certainly a bold prediction. The cryptocurrency market would possibly be worth over $50 trillion if stablecoins grew to $4T.

When we consider that institutions are actively pushing for the tokenization of real world assets, we can find ourselves with an industry worth $70 - $100 trillion over the next 5 years.

While this comes with a lot of positives for the crypto markets, it threatens traditional companies revenues, especially the banks.

Over 40% of JP Morgan Chase revenue comes from consumer banking.

This is $71.51 billion.

Over 40% of Bank of America's revenue also comes from consumer banking.

This is $41.44 billion.

Nearly 44% of Wells Fargo's revenue comes from consumer banking.

This is $36.20 billion.

These are the top 3 most valuable United States banks by market capitalization and a combined $149.15 billion revenue from their businesses is threatened by the growing stablecoin market.

If we look at the top 10-20 banks or even look at it globally, we will probably find that consumer banking is also a major revenue source.

The big question is: what will the banks do about it?

The answer is most likely asset management. Most, if not all banks will become asset managers. Of course, some of the major banks already have asset management subsidies, so many adjustments will be relatively easy.

This doesn't mean that several billions in revenue will not be lost. Fact is, some banks may not survive the transition. The growth of the stablecoin market will hurt the banks, becoming asset managers for digital assets owners will be the step to take towards staying alive as money moves on-chain.

Posted Using INLEO