JPMorgan: Stablecoins are the "cash infrastructure" of crypto, and the market share of tokenized money market funds is unlikely to exceed 10%-15%

According to Odaily, a recent JPMorgan report indicates that although tokenized money market funds are capable of generating returns, they still account for only about 5% of the broader "stablecoin ecosystem." The core role of stablecoins in the crypto ecosystem is unlikely to be replaced in the short term.

The report states that stablecoins have become the default "cash instruments" for trading, collateral, settlement, cross-border payments, and liquidity management, and are widely used in centralized exchanges and DeFi protocols. In contrast, tokenized money market funds are subject to securities regulations, which include registration, disclosure, and transfer restrictions, putting them at a structural regulatory disadvantage.

JPMorgan analysts led by Nikolaos Panigirtzoglou predict that unless there is a significant change in the regulatory environment, the market size of tokenized money market funds is unlikely to exceed 10%–15% of the overall stablecoin market. Current demand mainly comes from crypto-native investors seeking yields and institutional funds looking to benefit from both on-chain settlement and protection of traditional assets.

The report also points out that despite the advantages of tokenized funds, such as near real-time settlement, 24/7 transfers, and automated clearing, their growth is still constrained by liquidity, counterparty risk, and regulatory uncertainty. JPMorgan believes that without regulatory relaxation, these products will struggle to challenge stablecoins' infrastructural role in the crypto market. (CoinDesk)