Chainalysis: Stablecoin trading could hit $1.5 quadrillion by 2035

Chainalysis projects that global stablecoin trading volume could reach $1.5 quadrillion by 2035, reflecting expected growth in the use of price-stable digital tokens for trading, payments and decentralized finance. The estimate applies to activity recorded on public blockchains worldwide through 2035.

The projection comes from blockchain analytics firm Chainalysis and represents an upper-range scenario in which stablecoins become the primary on-chain instrument for value transfer and settlement between crypto-native and traditional financial participants. The firm based the estimate on historical on-chain transaction data and a set of growth scenarios modeling increased use for market trading, tokenized asset settlement and programmable payments.

Chainalysis describes stablecoins as widely used today to move value without converting back into fiat currency. Market participants use the tokens to provide liquidity on centralized exchanges, collateralize positions in decentralized exchanges and lending markets, and settle cross-border transfers that avoid slower or more expensive fiat rails. The report states improvements in wallet infrastructure, custody services and fiat on-ramps could support expanded use.

Factors the firm identifies as capable of accelerating volume growth include broader institutional participation in crypto markets, growth in decentralized finance applications that require stable collateral, and integration of stablecoins by payment service providers and merchants. The firm also points to technological changes that reduce transaction costs and increase throughput on public blockchains as enablers for more routine payment use.

Chainalysis warns the projection depends on regulatory and issuer-related variables. Regulators in multiple jurisdictions have examined the reserve backing and transparency of major stablecoin issuers. The report says clearer rules that require transparent, audited reserves and defined custody arrangements would likely support wider adoption, while tighter restrictions or legal challenges could limit activity.

The analysis notes competition from alternative settlement rails, including tokenized central bank digital currencies and upgraded traditional cross-border payment networks. If central bank digital currencies become widely available and interoperable with private stablecoins, on-chain volume could shift among different instrument types rather than increase uniformly.

The report outlines key stablecoin designs: fiat-collateralized tokens backed by government currency reserves, crypto-collateralized tokens backed by other digital assets, and algorithmic mechanisms that aim to maintain parity with a reference currency. Chainalysis indicates fiat-collateralized stablecoins have dominated market use for trading and liquidity provisioning.

Operational risks the firm highlights include counterparty exposure tied to issuer reserves, smart contract vulnerabilities in decentralized finance protocols, and fragmentation of stablecoin standards across blockchains. Chainalysis recommends greater transparency, standardized auditing practices and strengthened smart contract security as measures that could reduce those risks.

The firm says monitoring on-chain flows, issuer disclosures and policy changes will be important to assess whether actual trading volumes track toward the projected levels over the next decade.