💱 The potential of stablecoins is enormous, expected to grow from 1% of the US financial market to 10%
Many people are still unfamiliar with stablecoins, but they are quietly changing our financial world!
Currently, the market capitalization of stablecoins is less than $200 billion, accounting for only 1% of the US money supply and foreign exchange market. However, according to a joint report by Standard Chartered Bank and Zodia Markets, this proportion is expected to grow to 10%.
Stablecoins were initially a bridge asset for cryptocurrency trading, but today they have a wide range of uses in areas such as cross-border payments, payroll, trade settlement, and remittances. Their applications demonstrate the ability to solve efficiency problems in the traditional financial system, such as high costs, transaction delays, and accessibility limitations. By providing faster and cheaper transactions, they have become a key tool in modern finance, offering attractive solutions for international remittances and business operations.
The report also emphasizes the impact of stablecoins on the broader financial ecosystem. Currently, the total market capitalization of stablecoins seems insignificant compared to the $21 trillion M2 and $2.1 trillion daily foreign exchange spot trading in the US. However, if the market share of stablecoins reaches 10%, they could become a dominant force in global finance, reshaping the landscape of digital payments and settlements.
However, regulation is key to this transformation. Despite slow progress in establishing specific policies for stablecoins under previous US administrations, the report predicts that the Trump administration may prioritize these efforts by 2025. This regulatory clarity is expected to unlock the full potential of stablecoins, enabling them to further scale and diversify use cases.
Geographically, dollar-backed stablecoins account for 99.3% of the stablecoin market capitalization, with Tether and USD Coin as the main players. The Standard Chartered report cites a YouGov survey showing that in five emerging markets—Brazil, Turkey, Nigeria, India, and Indonesia—69% of respondents use stablecoins for currency substitution, and 39% use them for cross-border payments and transactions of goods and services.
In summary, the growth potential of stablecoins is enormous, and their role and influence in global finance cannot be ignored. With regulatory clarity and market maturity, we can foresee that stablecoins will play an even more important role in the future.
