Measuring the size of the stablecoin market is no simple task. Several organizations have produced sizable market forecasts based on estimates of stablecoin supply, tokenized asset values, and transaction volumes. But these figures don’t necessarily reflect the full revenue opportunities available to financial institutions.
In the Building the Case for Stablecoins: Javelin Models the Total Addressable Market report, Javelin Strategy & Research examines 32 U.S. outbound remittance corridors representing nearly $250 billion in annual flows to assess the potential market for stablecoin-enabled payments. By incorporating defined use cases, measurable payment activity, and an existing fee pool, Javelin develops bear, base, and bull scenarios to estimate the opportunity.
Searching for Data
A total addressable market (TAM) represents the overall revenue opportunity for a product or service within a given market. Industry analysts have approached the stablecoin market from several different angles, but each has limitations.
Total outstanding stablecoin supply offers a snapshot of the value currently in circulation, but doesn’t capture the market’s potential. Annual stablecoin transaction volume provides another useful measure, although it can be inflated by repeated turnover of the same balances. Others simply aggregate the stablecoins held in individual wallets.
“I’ve been involved in discussions where companies are getting data from consumers, and they’re leaning on decision making and strategy based off the consumer data,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin and author of the report. “If you wait for consumer demand, you’re going to miss this opportunity.”
Measuring Revenue
The most prevalent approach involves multiplying an asset value by an assumed adoption rate and presenting the result as a total addressable market. However, this doesn’t necessarily answer the more important question: How much revenue can participants actually generate?
Hugentobler’s approach builds on that model by incorporating additional inputs, including fees and one-way payment flows, and applying bear, base, and bull scenarios that account for regulatory conditions, adoption rates, and transaction volumes. The goal is to estimate the market opportunity in terms of what participants could realistically capture by pursuing stablecoin solutions.
The model starts with U.S. outbound remittance flows, applies an assumed stablecoin adoption rate, and then factors in remittance fees. The first two inputs estimate how much existing payment activity could migrate to stablecoin rails, while the fee component translates that activity into a potential revenue pool. Together, these inputs provide a more grounded estimate of the addressable market.
Money velocity is another important consideration when assessing TAM. Citi, for example, generally applies a velocity multiple of 50 in its own measurements, meaning $1 trillion in stablecoins could potentially support $50 trillion in transactions. This has implications for market estimates because the underlying stablecoin balances can facilitate activity across multiple services, including foreign exchange and last-mile payments.
The Last Mile
The last-mile component is receiving increasing attention across the industry, and for good reason. It remains one of the key pieces that must be addressed for stablecoin payments to reach their full potential.
“If a payment settles on a blockchain in seconds, but that last mile portion takes minutes or days, it’s a poor payment experience and it defeats the whole purpose,” said Hugentobler. “So there are quite a few companies that are really focusing on that last mile portion.”
Stablecoin providers are building their businesses around solving last-mile challenges, recognizing that ensuring a transaction can be completed efficiently is just as important as optimizing the middle mile. Before scaling a corridor, financial institutions need dependable payout partners, access to FX liquidity, identity verification capabilities, and processes for handling exceptions.
Treasury Use Cases
A large portion of stablecoin activity today is tied to treasury-related use cases. B2B payments, payroll, and capital markets settlement could ultimately represent even larger opportunities, but customer behavior and available data are less consistent, making these markets more difficult to quantify. Even so, interest in their potential continues to grow.
“They might find a problem that they want to solve with stablecoins,” Hugentobler said. “Then they realize, oh, wait a second, if we use stablecoins and we have an international business or offices all over the world and we’re paying suppliers, we can maintain all these balance sheets on one ledger instead of having to manage all these different systems and different cutoff times. And it can be transferred in seconds. That’s going to be a big topic of discussion in the coming year.”
The prevailing view is that payment processors should keep stablecoins invisible to consumers unless there is tangible benefit to holding them or knowing they are holding them. Consumers don’t necessarily need to understand which underlying mechanism makes a transaction more convenient or efficient for the financial institution.
A Conservative Case
The overall TAM for U.S. stablecoin remittances turned out to be somewhat smaller than Hugentobler initially anticipated. However, he emphasized that the figures should be viewed as particularly conservative estimates.
One consideration was the failure of the Clarity Act to advance in September, leaving the industry in a state of regulatory uncertainty as participants await the guidelines that could help fuel the next phase of growth. But that uncertainty may also obscure just how much the stablecoin market has already evolved.
“It’s definitely come a long way,” said Hugentobler. “Some things still need to be worked out from the bigger players in the market that handle a lot more volume, but it’s coming for sure.”
Despite this progress, stablecoins remain overlooked in many corners of the financial industry. As more organizations become familiar with the possibilities, an increasing number appear poised to enter the market.
Hugentobler recently asked a digital remittance company how much of its payment volume it was already processing in stablecoins.
“He said, ‘We haven’t seen a ton of demand,’” Hugentobler said. “And I said, ‘What do you mean by that?’ He said, ‘Well, consumers would rather just pay with what they know.’ I said, right, I agree 100%, but if the fees are way less and they don’t even know they’re using a stablecoin, why would they not use a cheaper alternative? And I could just see the wheels turning.”