Velocity measures how often the same stablecoin is reused in transactions over a given period.
Stablecoin News
Rising transaction velocity in the stablecoin market could limit how much total market cap grows, even as payment volumes keep climbing, according to a report published May 1 by JPMorgan analysts. The finding challenges the assumption that faster adoption will translate directly into a larger market.
Velocity measures how often the same stablecoin is reused in transactions over a given period. Analysts led by managing director Nikolaos Panigirtzoglou said velocity has risen sharply over the past year. As efficiency improves, the same pool of stablecoins can process a much higher volume of transactions without requiring market cap to expand at the same rate.
"The more widely used stablecoin-based payment systems become, the higher their efficiency and thus their velocity," the analysts wrote. "In turn, higher velocity would likely limit the expansion of the stablecoin universe going forward, even if their usage in payments rises exponentially from here."
The stablecoin market cap has grown by nearly $100 billion over the past year. Including yield-bearing stablecoins, the total market size now exceeds $300 billion. That pace of growth has outrun the broader crypto market cap, which the analysts said points to stablecoins being used beyond trading and collateral functions.
On-Chain Volume Runs at $17T Annual Pace in 2026
On-chain stablecoin transaction volume is running at an estimated annual pace of $17.2 trillion in 2026, based on year-to-date figures compiled by the analysts. They attributed a portion of that acceleration to the passage of the GENIUS Act. Research from a16z crypto, cited in the report, shows that consumer-to-business and merchant payments are growing faster than consumer-to-consumer activity, with Asia remaining the dominant region for stablecoin use.
JPMorgan's team has held a cautious view on market cap projections for some time. In December 2025, the same analysts projected the stablecoin market cap would reach $500 billion to $600 billion by 2028, well below the $1 trillion figures cited by others. In May 2025, they described those $1 trillion forecasts as "far too optimistic."
The bank's latest report reinforces that position. Higher velocity means each unit of stablecoin supply does more work per transaction, reducing pressure on issuers to mint additional supply. Whether that dynamic holds as institutional adoption and regulatory clarity increase remains the variable stablecoins watchers are tracking.
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