The stablecoin has enjoyed tremendous success in 2024, reaching an all-time high circulating supply of over $200 billion in December.
Stablecoins — cryptocurrencies designed to mimic the value of a currency, most commonly the US dollar — are an integral part of the cryptocurrency ecosystem and account for 5% of the market capitalization.
As 2025 approaches, Cointelegraph has compiled industry forecasts and predictions for key stablecoin trends that could take place in the coming year.
Next Stop is $300 Billion: USDT and USDC Will Still Dominate
Multiple industry executives and founders have told Cointelegraph that Tether’s USDt and Circle’s USD Coin — the two largest stablecoins by market capitalization — are likely to maintain their dominance into 2025.
Guy Young, founder of decentralized stablecoin protocol Ethena, predicts that USDT will continue to be the largest stablecoin next year and the total stablecoin market capitalization will grow to $300 billion.
“I expect us to cross the $300 billion mark, Tether continues to dominate with their existing advantage, and the rest of the market is being challenged by new fintech and Web2 companies with their own services,” Young told Cointelegraph.
Alchemy Pay’s chief marketing officer, Ailona Tsik, said stablecoins like USDT and USDC “have established themselves as important tools for global transactions and their adoption across emerging markets and decentralized applications is likely to accelerate.”
“Fiat-backed stablecoins like USDT and USDC are likely to maintain their dominance due to their established credibility, liquidity, and the large ecosystem of users and businesses that rely on them.”
Coinbase, which is partnering with USDC, said in its 2025 outlook that stablecoins are “just getting started” as some analysts predict the token could grow into a $3 trillion market in the next five years.
Stablecoin Payments: Visa Expects Demand for Stablecoin Cards to Surge
Visa’s head of crypto, Cuy Sheffield, told Cointelegraph that stablecoin adoption could modernize and streamline global payments, but current stablecoin spending opportunities remain limited.
“If 2024 is the year that stablecoin demand picks up again, then 2025 will bring the next big opportunity: the rise of stablecoin-linked tokens,” Sheffield said.
“In 2025, this demand will only increase as wallets look to capitalize on stablecoin adoption and issue stablecoin-linked cards.”
Visa will expand its capabilities to allow issuers to settle stablecoin-linked cards directly with the stablecoin payments giant, he said.
CEO of cryptocurrency platform Uphold, Simon McLoughlin, is also optimistic about growing payments adoption in the coming year.
“2025 will be the year that stablecoins become ubiquitous as a means of international payments,” McLoughlin said, highlighting new stablecoins aimed at cross-border payments, such as Ripple Labs’ Ripple USD (RLUSD), which began trading on December 17.
BitPay’s chief market officer Bill Zielke told Cointelegraph that stablecoins will account for at least a quarter of volume by 2024 on the crypto payments platform despite only accounting for 5% of total transactions.
“While the average BTC transaction value at BitPay is just over $1,000, the average USDC transaction value is over $5,000,” he said.
“We expect this trajectory to continue into 2025 as stablecoins continue to solidify their role in global trade and business-to-business payments,” Zielke added.
Regulatory differences and the need for consistent regimes will persist
While many are optimistic about the growth of stablecoins by 2025, regulations surrounding the token are still inconsistent globally.
“One of the key challenges we foresee for stablecoins in 2025 is navigating the changing regulatory landscape,” said Alchemy Pay’s Tsik.
BitGo's head of stablecoins, Ben Reynolds, said regulatory uncertainty and the need for more transparency will remain significant challenges in 2025 until lawmakers provide clear guidance.
True Markets founder Vishal Gupta told Cointelegraph that the stablecoin regulatory landscape “will still face inefficiencies and fragmentation due to inconsistent regulatory regimes.”
He referred to the global regulatory divergence resulting from the introduction of EU-specific stablecoin rules, particularly the Markets in Crypto-Assets Regulation (MiCA).
“Regulatory divergence can open up opportunities in areas with clear, balanced regulation, but create challenges in areas where regulation is too complex or restrictive,” Gupta said.
With U.S. President-elect Donald Trump set to take office in January, companies like BitPay are looking for more clarity and consistency in how they regulate the cryptocurrency and stablecoin markets.
Stablecoin Trends in 2025: L2, Yield, and Interoperability
Many industry executives predict further stablecoin growth next year in areas such as layer 2 (L2), yield, and interoperability.
BitPay's Zielke said the adoption of L2 stablecoins on networks like Arbitrum, Optimism, and Base will be one of the biggest areas of growth for these tokens in 2025.
Tether CEO Paolo Ardoino said stablecoins “will be the most important technology for money in the next few decades and there will be a fusion between blockchain and L2.”
BitGo's Reynolds predicts next year will see a push for greater interoperability between blockchains to allow stablecoins to move seamlessly across the entire crypto space, which True Markets' Gupta notes will open up "new use cases in both the retail and institutional markets."
With L2 adoption and interoperability increasing, the stablecoin industry is likely to see more profitable stablecoin solutions by 2025.
Azeem Khan, CEO of Ethereum platform L2 Morph, highlighted stablecoins like PayPal USD that offer yield rewards simply for holding stablecoins. Companies like BitGo have also introduced yield-generating stablecoins by 2024.
“There will be other yield-generating stablecoins entering the market with the aim of attracting more holders and finding ways to get them used as a payment method in some places,” Khan said.
The risks of “exotic” stablecoins
As demand for stablecoin yields increases, there will be a rise in “exotic” stablecoins or those designed to offer higher yields, said True Markets’ Gupta.
“The pursuit of higher returns will likely lead to the creation of ‘exotic’ stablecoins that effectively act as structured financial products, posing risks that retail users may not fully understand,” he added.
Gupta warns that retail investors can be lured by the promise of higher returns without fully understanding the risks involved, which could potentially lead to significant losses.
“Industry participants must prioritize transparency, detailed risk disclosure, and education for retail users. Regulators should set clear standards to protect consumers while maintaining room for innovation.”
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