Dollar Dominance Gets a Crypto Boost—JPMorgan Says Stablecoins Could Drive $1.4 Trillion in New Demand by 2027

Core Insights - The narrative that cryptocurrencies threaten the U.S. dollar's global supremacy has been challenged, with JPMorgan Chase analysts predicting that stablecoins could enhance dollar dominance by generating up to $1.4 trillion in additional demand by 2027 [2][4] Stablecoin Market Dynamics - Approximately 99% of the $260 billion stablecoin market is pegged 1:1 to the dollar, indicating that conversions from local currencies to stablecoins like Tether create new demand for U.S. dollars [3][5] - JPMorgan forecasts the stablecoin market could grow from its current valuation of $260 billion to as much as $2 trillion in a high-end scenario, which would significantly impact global currency markets [4][5] Implications for Traditional Finance - The growth of the stablecoin market is seen as critical infrastructure for digital finance, facilitating crypto trading, cross-border payments, and everyday transactions, especially in emerging markets with volatile local currencies [6] - JPMorgan's analysis highlights the increasing importance of the stablecoin market in traditional finance, legitimizing an asset class previously viewed as a fringe experiment by regulators and banks [7]