A recent report revealed how much stablecoins currently represent in the US money supply and the size of the foreign exchange market, indicating that stablecoins represent less than 1% and have an estimated market value of about $200 billion.
A joint report by Standard Chartered and Zodia Markets Research predicts that this sector could grow to account for 10% of M2 and foreign exchange transactions in the future.
The uses of stablecoins have expanded beyond their traditional role as a cryptocurrency trading tool, to include cross-border payments, payroll, trade settlements, and remittances.
Stablecoins have flourished due to their ability to reduce costs and speed up financial transactions, as stablecoins have become an effective alternative that addresses the problems of traditional financial systems.
If it achieves a 10% market share, it will revolutionize the global financial system.
The report also highlights the importance of regulatory clarity in achieving this growth.
While progress has been limited in the United States, it is expected that a future government may prioritize the legalization of stablecoins, which could expand their use cases.
Dollar-backed stablecoins dominate the market with 99.3%, led by Tether (USDT) at 73% and USD Coin (USDC) at 21%.
In emerging markets such as Brazil, Turkey, Nigeria, India and Indonesia, 69% of users see it as an alternative to local currency, and 39% use it for cross-border payments and commercial transactions.