BofA: Stablecoin Supply Could Soar $25–75B Amid New US Regulation
Bank of America’s latest report forecasts a surge in stablecoin supply of $25 billion to $75 billion over the next year, driven by regulatory clarity from the GENIUS Act and CLARITY Act. These laws lower institutional barriers, enabling insurers, funds and global banks to issue or hold stablecoins. Retail adoption is rising—Shopify now accepts USDC—and cross-border payments benefit from faster settlement and lower fees. Institutional use is emerging, with on-chain U.S. Treasury repo transactions demonstrating stablecoins’ role in fixed-income settlements. High-liquidity stablecoins offering yield are challenging money market funds and boosting demand for short-term U.S. Treasuries by an estimated $25 billion to $75 billion. Major banks are responding: BofA is developing its own stablecoin, JPMorgan and others are evaluating Ripple’s RLUSD to cut cross-border costs. The report concludes that stablecoins are now essential infrastructure for financial markets, marking a pivotal shift for banks, funds and tech firms.
Bullish
The report signals a major institutional shift toward stablecoins, underpinned by clear U.S. regulation. Historically, regulatory clarity—such as in the aftermath of ESMA’s crypto guidelines in Europe—has spurred institutional adoption and market growth, proving bullish for crypto liquidity and trading volumes. In the short term, expanded stablecoin supply will enhance on-chain liquidity, lower transaction costs and support higher trading frequency. Long term, banks issuing native stablecoins and integrating blockchain settlement could drive sustained capital inflows into crypto markets, broadening use cases across DeFi and payments. This convergence of regulation and institutional participation is likely to bolster market stability and foster renewed investor confidence, reinforcing a bullish outlook.