JP Morgan sees market share of yield-bearing stablecoins growing from 6% to 50%

Analysts at JPMorgan predicted that the market share of yield-bearing stablecoins could grow from the current 6% level to as much as 50% in the future.
On the 27th (local time) The Block reported that JP Morgan analysts believe that yield-bearing stablecoins will be a popular medium in today's high interest rate environment.
He said the funds are attracting investors in a way similar to traditional money market funds and that they are expected to grow rapidly.
Nikolaos Panigirtzoglou, Managing Director at JP Morgan
In a report released today, a team of analysts led by Ikolaos Panigirtzoglou said that yield-bearing stablecoins now make up the majority of the overall stablecoin market.
The report also predicts that the top five yield-bearing stablecoin projects, Ethel, are the largest.
USDe by Na, USDS by Skydollar, BUIDL by BlackRock, USD0 by Usual Protocol
"Ondo Finance's USDY" grew rapidly after the US presidential election last November.
The report said that the company's market capitalization has increased from about $4 billion to more than $13 billion. It expects this growth to continue. In particular, the company was recently registered as a security by the U.S. Securities and Exchange Commission (SEC).
The report analyzed that the approval of YLDS, a yield-bearing stablecoin, will provide additional impetus to this market.
Existing stablecoins like Tether (USDT) and Circle (USDC) are either in reserve or
The interest earned from collateral is not shared with users. If it were shared, it would be classified as a security and would be subject to additional compliance requirements, which is why collateral funds in the current crypto ecosystem are not used.
Several key factors have been cited behind the growth of yield-bearing stablecoins. First, investors are looking to make money without taking on significant risk.
They prefer assets that can earn interest. Also, major cryptocurrency trading platforms like Deribit and FalconX are using tokenized government bonds as collateral.
Its acceptance has allowed traders to leverage their collateral to generate revenue, and the DeFi market has also seen a rise in demand for yield-bearing stablecoins.
As DeFi yields have fallen significantly since peaking in 2022, investors are turning to tokenized government bond assets that offer higher yields than traditional DeFi products.
They believe that projects such as Frax Finance are adopting Treasury tokenized assets as underlying assets, contributing to the growth of the market.
However, because yield-bearing stablecoins are classified as securities, there are regulatory constraints that limit access for retail investors.
In addition, the high liquidity of existing stable coins is also one of the hurdles to market expansion.
Currently, traditional blockchains and cryptocurrencies trade on centralized exchanges.
Tablecoins have created a combined $220 billion market, allowing for efficient, fast and low-cost transfers for large transactions. Yield-bearing stablecoins, on the other hand, are relatively new.
"This liquidity problem may be gradually resolved over time," he said. "In particular, the cryptocurrency derivatives market is facing a lot of liquidity problems.
"It will be increasingly used as a security, a DAO treasury, a liquidity pool, or as idle funds for cryptocurrency venture funds, which will enable gradual market expansion."