By: Helen Partz, CoinTelegraph; Translated by: Bai Shui, Jinse Finance.
Crypto stablecoins achieved significant success in 2024, with circulation reaching an all-time high of over $200 billion in December.
Stablecoins—cryptocurrencies designed to mimic the value of currencies, most commonly the US dollar—are an indispensable part of the crypto ecosystem, accounting for 5% of its market cap.
As 2025 approaches, this article summarizes industry predictions for the major trends in stablecoins for the coming year.
Next stop is $300 billion: USDT and USDC will maintain their dominance.
Several industry executives and founders indicated that Tether's USDT and Circle's USD Coin (the two largest stablecoins by market cap) are likely to maintain their dominance in 2025.
Guy Young, founder of the decentralized stablecoin protocol Ethena, predicts that USDT will continue to be the largest stablecoin next year, with the total market cap for stablecoins rising to $300 billion.
“I expect our circulation to exceed $300 billion, with Tether continuing to dominate due to its existing moat, while the rest of the market faces challenges from new fintech and Web2 entrants and their own products,” Young noted.
As of December 24, the top five stablecoins ranked by market cap. Source: CoinGecko.
Ailona Tsik, Chief Marketing Officer at Alchemy Pay, stated that stablecoins like USDT and USDC “have already become important tools for global transactions, and their adoption in emerging markets and decentralized applications may accelerate.”
“Fiat-backed stablecoins like USDT and USDC may retain their dominance due to their established credibility, liquidity, and the wide ecosystem of users and businesses that rely on them.”
Coinbase, a partner of USDC, stated in its 2025 outlook that stablecoins are “just getting started,” with some analysts predicting that these tokens could grow into a $3 trillion market within the next five years.
Stablecoin payments: Visa expects a surge in demand for stablecoin cards.
Visa's cryptocurrency chief Cuy Sheffield pointed out that the adoption of stablecoins could modernize and streamline global payments, but existing consumption opportunities for stablecoins remain limited.
“If 2024 is a year of recovering demand for stablecoins, then 2025 will bring the next key opportunity: the rise of stablecoin-linked cards,” Sheffield said.
“By 2025, as wallets hope to leverage the adoption of stablecoins and issue stablecoin-linked cards, this demand will only increase.”
He said that Visa will expand its capabilities to allow issuers to settle stablecoin-linked cards directly with payment giants using stablecoins.
Simon McLoughlin, CEO of crypto platform Uphold, is also optimistic about the increased payment adoption in the coming year.
“2025 will be the year stablecoins enter the mainstream as international payment tools,” McLoughlin said. He highlighted new types of stablecoins aimed at cross-border settlements, such as Ripple Labs' Ripple USD (RLUSD), which began trading on December 17.
Ripple began transferring RLUSD on exchanges on December 17. Source: Ripple.
Bill Zielke, Chief Marketing Officer at BitPay, stated that although stablecoins only account for 5% of all transactions, by 2024, they will represent at least a quarter of the transaction volume on crypto payment platforms.
“While the average BTC transaction value on BitPay is slightly above $1,000, USDC transactions average over $5,000,” he said.
“We expect this trend to continue into 2025 as stablecoins further solidify their role in global commerce and business-to-business payments,” Zielke added.
Regulatory discrepancies and the demand for a consistent framework will persist.
Despite many being optimistic about the growth of stablecoins in 2025, global regulation of stablecoins remains inconsistent.
Tsik from Alchemy Pay stated, “We foresee that one of the main challenges for stablecoins in 2025 will be navigating the changing regulatory environment.”
Ben Reynolds, head of stablecoins at BitGo, stated that regulatory uncertainty and the demand for increased transparency will remain significant challenges in 2025 until legislators provide clear guidance.
“Overview of Crypto Regulation” from PwC's 2023 Crypto Regulatory Report. Source: PwC.
Vishal Gupta, founder of True Markets, pointed out that the legal environment for stablecoins “will still face inefficiencies and fragmentation due to inconsistent regulatory frameworks.”
He mentioned the global regulatory discrepancies triggered by the EU's introduction of specific stablecoin regulations, particularly concerning the regulation of the crypto asset market (MiCA).
“Regulatory discrepancies may create opportunities in regions with clear and balanced rules, but will also pose challenges in areas with overly complex or stringent regulations,” Gupta stated.
With Donald Trump, the elected president of the United States, preparing to take office in January, companies like BitPay hope for clearer and more consistent regulation of stablecoins and the crypto market.
2025 Stablecoin Trends: L2, Yields, and Interoperability.
Many industry executives predict that stablecoins will further develop in areas such as Layer 2 (L2), yields, and interoperability next year.
BitPay's Zielke stated that the adoption of L2 stablecoins on networks such as Arbitrum, Optimism, and Base will be one of the largest development areas for tokens in 2025.
Tether CEO Paolo Ardoino stated that stablecoins “will become the most important monetary technology for the coming decades, with blockchain and L2 integrating.”
Reynolds from BitGo predicts that next year will drive greater interoperability between blockchains to enable seamless transfers of stablecoins in the cryptocurrency space, noting that this will unlock “new use cases for retail and institutional markets.”
Ethereum, Tron, and Avalanche are the three major networks for USDT. Source: Tether.
As the adoption of L2 and interoperability becomes more widespread, the stablecoin industry may also see more yield-generating stablecoin solutions in 2025.
Azeem Khan, COO of Ethereum L2 platform Morph, emphasized that stablecoins like PayPal USD can provide yield rewards simply by holding stablecoins. Companies like BitGo are also launching yield-generating stablecoins in 2024.
“Other yield-generating stablecoins will enter the market, seeking to attract more holders and find ways to incorporate them as payment options,” Khan said.
Risks of 'exotic' stablecoins.
Gupta from True Markets stated that as demand for stablecoin yields increases, “exotic” stablecoins (those designed to provide higher returns) will also increase.
“The pursuit of higher yields may lead to the emergence of ‘exotic’ stablecoins, which essentially function as structured financial products, hiding risks that retail users may not fully understand,” he added.
Gupta warned that retail investors may be tempted by promises of higher returns without fully understanding the associated risks, which could lead to significant losses.
“Industry participants must prioritize transparency, detailed risk disclosures, and education for retail users. Regulators should establish clear standards to protect consumers while maintaining space for innovation.”
