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

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The narrative that crypto threatens the U.S. dollar’s global supremacy just took a major hit. In a striking reversal of conventional wisdom, JPMorgan Chase Co. (NYSE:JPM) analysts predict stablecoins could actually reinforce dollar dominance by generating up to $1.4 trillion in additional demand by 2027—turning what skeptics feared would accelerate de-dollarization into one of the greenback’s most powerful digital allies.

The math is simple but profound: approximately 99% of the $260 billion stablecoin market is pegged 1:1 to the dollar, meaning every time a foreign household or corporation converts local currency into stablecoins like Tether, it represents fresh U.S. dollar demand, according to a JPMorgan note published on Oct. 7, according to media reports.

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The High-End Scenario That Could Reshape Global Finance

JPMorgan’s projection isn’t pulled from thin air. The investment bank envisions the stablecoin market exploding from its current $260 billion valuation to as much as $2 trillion in their high-end scenario. If that trajectory materializes, the cumulative dollar inflows could become significantly impactful for global currency markets, Reuters reported.

JPMorgan noted that whether a high-end growth scenario for stablecoins actually materializes remains uncertain. If it does, dollar inflows tied to stablecoins could become cumulatively significant. The bank emphasized that growth in the stablecoin market inherently drives strong demand for dollars, given the near-total dollar peg across the sector.

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This isn’t just theoretical economic modeling. Stablecoins have emerged as critical infrastructure for digital finance, serving as the on-ramp for crypto trading, cross-border payments, and increasingly, everyday transactions in emerging markets where local currencies face volatility or capital controls.

The significance of JPMorgan’s analysis extends beyond crypto circles. The report underscores the burgeoning stablecoin market’s growing importance in traditional finance, legitimizing an asset class that regulators and banks once dismissed as a fringe experiment, according to Reuters.

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This article Dollar Dominance Gets a Crypto Boost—JPMorgan Says Stablecoins Could Drive $1.4 Trillion in New Demand by 2027 originally appeared on Benzinga.com

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