New regulatory efforts promoting the integration of the dollar-pegged coins into the mainstream economy might soon make that happen, CoinDesk reported Monday (May 12), citing predictions by Citi.
Already moving into the payments/remittances space, stablecoins will likely replace some overseas and domestic U.S. currency holdings, the report said, pointing to a recent report from Citi Institute’s Future Finance think tank.
“We’re looking at the integration of stablecoins into what you call the mainstream economy,” Ronit Ghose, the global head of the think tank, told CoinDesk. “For example, stablecoins could be the cash leg for tokenized financial assets, or for payments by SMEs and large corporates. The dollar, and to a lesser extent the euro, has this kind of international currency status. Stablecoins allow people all over the world to hold dollars or euros in an easy, low-cost way.”
The report noted that the current stablecoin market is around $240 billion, most of it from two coins: Tether’s $145 billion USDT and Circle’s $60 billion USDC. Citi’s baseline projection shows the market jumping to $1.6 trillion by 2030, assuming regulatory support and institutional integration continue apace.
A more optimistic scenario would push the market to $3.7 trillion, a figure that surpasses the current global cryptocurrency market cap of $3.45 trillion.
The report also includes comments from Michael Shaulov, CEO of crypto firm Fireblocks, who has witnessed a shift away from the use of stablecoins as a settlement and on/off ramp trading tool and toward payments.
“Payment companies represent 11% of all of our clients, but 16% of the overall stablecoin transactions with over 30% growth of Q/Q in volumes. This growth will likely continue, and they will represent 50% of the stablecoin volume within 12 months,” he said.
In related news, PYMNTS spoke Monday with Konstantin Anissimov, newly appointed CEO at Currency.com, about the changing stablecoin landscape.
“There’s been a big shift in terms of adoption of stablecoin payments that is being driven by uncertainty in geopolitics,” Anissimov told PYMNTS CEO Karen Webster. “I am personally seeing a big increase of small to medium enterprises utilizing stablecoin payments because banking rails are harder and harder to use.”
Digital assets are no longer a speculative play for those people who embrace risk, but a tool to navigate a fragmented financial world, he added.
“If the payment gets there quicker, faster, in a more definitive way, then a lot of these businesses are limited less in their working capital requirements,” Anissimov said. “The faster the payment, the more goods they can buy.”
