Stablecoins may drum up $1.4 trillion of extra dollar demand by 2027, JPM says

Core Insights - The adoption of stablecoins could lead to an additional $1.4 trillion demand for U.S. dollars by 2027 if overseas investors show interest in these digital assets [1][2] - The growth of the stablecoin market is expected to reinforce the dollar's role in global finance rather than accelerate de-dollarisation [2] Market Overview - The current stablecoin market is valued at $260 billion and could potentially grow to $2 trillion in a high-end scenario [3] - Approximately 99% of stablecoins, like Tether, are pegged 1:1 to the dollar, indicating that converting local currency into stablecoins would create new demand for U.S. dollars [3][5] Contextual Information - Stablecoins are digital tokens with stable values against traditional currencies, primarily the dollar, and are backed by reserves such as currency or other assets like Treasuries [4] - Euro zone finance ministers are set to discuss the support for euro-denominated stablecoins, highlighting the growing interest in stablecoin development [4]