The stablecoin market has seen some remarkable records as issuers experiment with new coins beyond Tether (USDT) and Circle's USDC. In this context, Euro-backed stablecoins have entered the market, but users still prefer USDT and USDC. Now, let's see what emerging trends are approaching in 2025.

When Bitcoin surpassed the $100,000 mark in 2024, the total issuance of Stablecoins reached a new record as Singapore reported $1 billion in stablecoin payment value, a figure likely to increase further as we enter the new year.

Top 5 Reasons Why Stablecoins Will Explode in 2025

In 2024, the Stablecoin market rebounded by 29% and reached a supply of $168 billion by mid-August, with USDT and USDC accounting for 90% thanks to global adoption as Hong Kong's experimental stablecoin issuance mechanism promotes integration into the existing cryptocurrency regulatory framework.

These regulatory changes will be implemented in 2025 as some countries like the UK and Japan, etc., are changing laws to adopt stablecoins.

Governments around the world are trying to establish experimental legal frameworks to maintain oversight and allow innovation in the adoption of stablecoins like Hong Kong, facilitating financial institutions to innovate with stablecoins.

The European Union has the Markets in Crypto-Assets (MICA) regulating the issuance of stablecoins across the EU while the Financial Stability Oversight Council (FSOC) ensures financial stability by overseeing risks related to stablecoins. Japan has the Payment Services Act regarding operational and reserve requirements for stablecoin issuers.

Meanwhile, UK Economic Secretary Tulip Siddiq revealed in November that the UK government aims to introduce draft regulations for Stablecoins in early 2025. Experts view this as a move to address the situation of cryptocurrency companies moving to the United States due to Trump's policies.

The Rise of Regulated Stablecoins

This year has shown how regulated Stablecoins can be profitable. The most notable example is Tether (USDT) which surged by $5.2 billion in Q1 2024 after putting reserves into US Treasury bonds.

Through this strategy, a regulated stablecoin will be launched first and then traded on a well-known cryptocurrency exchange for promotion. This leads to stable returns as users invest in fiat reserves. Cryptocurrency exchanges typically do not take any commission on stablecoins due to their promotional feature, ultimately attracting traders. Even traditional financial giants find it hard to ignore this formula and have adopted stablecoins.

Changes in the European Market

The stablecoin market is quite concerned about the status of USDT in Europe currently as it lacks the necessary MICA license for compliance. In fact, many cryptocurrency exchanges are reportedly preparing to delist Tether for European users. If that happens, the stablecoin will lose significant market share.

On the other hand, this will open up new avenues for Circle's USDC, which has already received regulatory approval.

The MICA framework encourages domestic companies to participate in the market as seen in the increase in Euro-backed stablecoin issuance in 2024. This will continue to enhance competition in this sector, steering the market away from dollar-centric options.

The Increase in Stablecoin Payment Coordination

Cryptocurrency companies like BVNK will emerge as prominent players in 2025 due to their Stablecoin payment coordination feature, facilitating greater adoption of digital assets in areas such as paying millions of freelancers worldwide. This infrastructure will make sending and receiving Stablecoins easier, similar to bank payments.

This year, payments using stablecoins as a B2B payment method have significantly increased as businesses and PSPs use this digital asset to pay international merchants and partners. This figure is expected to increase further in 2025 as marketplace platforms ensure that their global servers, sellers, contractors, and creators are paid in stablecoins.

Stablecoins Will Penetrate Local Currency Territories

Last but not least, the trend of Stablecoins dominating local currency markets as locally pegged coins increase. This is seen through how the UAE central bank launched the AE Coin stablecoin, which is the first stablecoin managed by a central bank in the world.

Local stablecoins are more likely to be integrated into the banking system of that jurisdiction as countries digitize their economies. This will further drive the stablecoin market's growth.

Regulations like MICA have been established to enforce mandatory licensing for stablecoin issuers, enabling banks to provide custody services, acting as a catalyst for the integration of stablecoins into the traditional financial system.

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