Stablecoins are unlikely to be fully replaced by tokenized treasuries, JPMorgan (JPM) said in a research report Thursday.

It is “conceivable” that over time, tokenized treasuries could replace most of the cash sitting unused within stablecoins, the report said.

Still, the bank said a full replacement of stablecoins seems unlikely. This is because tokenized treasuries are at a regulatory disadvantage due to their classification as securities. This means they are subject to more restrictions than stablecoins, limiting their use as collateral in the wider crypto ecosystem

The report also said the amount of “idle cash” within stablecoins is hard to calculate, but it is unlikely to “represent the majority of the stablecoin universe.” For this reason, tokenized treasuries, such as Blackrock’s BUIDL, will likely only replace a small part of the stablecoin market, JPMorgan noted.

A stablecoin is a type of crypto designed to hold a steady value and is usually pegged to the U.S. dollar, though other currencies and commodities such as gold are also used.

The bank noted that stablecoins currently have a large advantage over tokenized treasuries when it comes to liquidity. With a total market of almost $180 billion across many blockchains and centralized exchanges (CEX), stablecoins offer low transaction fees even on larger trades.

“This deep liquidity supports seamless trading,” analysts led by Nikolaos Panigirtzoglou wrote.

Tokenized treasuries, in contrast, have much lower liquidity, the bank noted, adding that this disadvantage may lessen over time as the products gain more traction.