Citigroup has put out a new report attempting to envision a place for banks in a world where stablecoins become popular.

Why it matters: Citi's base case sees the stablecoin market quintupling over the next five years, with a bull case projecting nearly $4 trillion.

Zoom in: The report cautions that predictions about market size are complicated and should be met with caution. However, it sees a number of drivers for stablecoin growth.

• The report's contributors bet a major source of growth will come from a shift in the way global players hedge against local currencies, moving from holding dollars to holding stablecoins.
• Another driver is expected to be people and businesses substituting traditional checking accounts for stablecoins for short-term liquidity needs, such as payments and cash management, taking advantage of blockchain's more convenient rails.
• And finally, stablecoin growth will likely come with the overall growth of crypto as a real industry.

The intrigue: Citi makes one bold claim, that looks good for the dollar.

• "We expect the stablecoin supply will remain US dollar denominated (approx. 90%), with non-US countries promoting national currency [central bank digital currencies]."

The big picture: The relationship between banks and stablecoins could benefit all sides — banks gain better products through blockchain, while stablecoins gain legitimacy with institutional investors and businesses.

• Stablecoins might hurt bank deposits, but the report sees lots of other ways for banks to stay relevant. Some banks, for example, are already playing a role providing custody for stablecoin reserves.
• On top of that, banks can broker the purchases of stablecoin reserve assets, such as U.S. Treasuries, for issuers.

Meanwhile, with coming legislation they will be able to issue stablecoins, serve as a bridge between crypto and traditional money and offer new kinds of financial products based on stablecoins.

• There are also going to be new kinds of businesses in clearing and settlement created by stablecoins.

Friction point: Citi brings up something that has been a favorite topic of this newsletter.

• "At a system level, stablecoins may have a similar impact as 'narrow banks' and there is a long policy debate on the pluses and minuses of such institutions."

The bottom line: "2025 has the potential to be blockchain's 'ChatGPT' moment for adoption in the financial and public sector, driven by regulatory change," the authors write.

💭 Our thought bubble: 👆

"It is time for the SEC to end its waywardness and return to its core mission that Congress set for it: investor protection, fair, orderly and efficient markets and capital formation. ... A top priority of my chairmanship will be to provide a firm regulatory foundation for digital assets through a rational, coherent and principled approach."

👂 Sources: Market structure draft is coming very soon. (Unchained)

🔍 One little Dallas bank is in regulatory limbo. It has been providing correspondent banking services to global banks for crypto firms but has run afoul of anti-money laundering rules. (The Information - paywall)

🚔 The dad of a father-and-son crypto crime family was sentenced to 18 years. (Decrypt)

🕵️‍♂️ Coinbase has its eyes on Charlotte talent. (Axios Charlotte)

👯‍♀️ Crypto won't give up on popularity contests. (The Block)

The Official Trump meme coin is up 30% today on news that its biggest holders will get to have dinner with Donald Trump, the president of the United States.

Why it matters: The big question about this crypto token was whether or not buying it would offer privileged access to the president, and now we have an answer.

Between the lines: The meme coin's creators — CIC Digital LLC and Fight Fight Fight LLC, which are linked to the Trump Organization — are indeed offering a perk for holding it.

• According to the meme coin's website, the top 220 holders will be invited to a dinner with the president on May 22 (Bitcoin Pizza Day).
• The top 25 will get to go to a reception before the dinner and a "special VIP White House Tour" the following day.
• The website bills the event as "the most exclusive invitation in the world."

How it works: To indicate interest in attending, users must register by connecting their wallet on the website. Then, supposedly, they need to start accumulating tokens to make sure they are in the top spot (which would create buying pressure and drive up the price).

• Invites will be determined by average balances from today to May 12.

💭 Our thought bubble: Shorts are gonna make a lot of money on May 13.

By the numbers: Top holders do seem to be buying to preserve their positions.

• As of yesterday afternoon, the holder on chain with the 25th largest supply has just over 1 million tokens, valued currently at over $13 million. That hasn't changed much.
• But, the 220th largest holder had 26,633 of the meme coins (about $350,000 worth), when we first wrote about this yesterday.
• Today, the 220th largest holder has about 20% more than the person in that spot yesterday, with 31,999 tokens.

Follow the money: Before the dinner was announced, the meme coin was trading in the $9 range.

• It looked like it might hit $15 yesterday, but it didn't quite get there. Now it's trading around $12.

Flashback: Trump's conversion to crypto began 11 months ago when he had a similar dinner, at his Mar-a-Lago Club in Palm Beach, for holders of his NFTs.

What we're watching: Another 40 million meme coins of the team's allocation were recently set to unlock for trading, which would put downward pressure on price.

• But those tokens have not moved. This Solana address still holds 80% of the supply.
• Yesterday's announcement created a better environment to sell those tokens into, however.