From Billions To Trillions: The Explosion Of Stablecoins
It is coming.
This is something that we forecast over the last couple years. Others are now seeing the same thing, with some predictions mirroring this sentiment.
Stablecoins will be the medium of exchange in the future. These are going to be based upon fiat denomination, mostly the US dollar. They will include asset backed along with what is now being called "dark" stablecoins.
Here is where we are seeing crypto's killer app. For years, the industry was looking for this. Of course, in the early form, we see how the banks (and Wall Street) are hijacking it. However, my guess is we are watching simply a phase. Eventually, the "dark" stablecoin market will take over.
From Billions To Trillions: The Explosion Of Stablecoins
A market that is poised for a 10x increase in a little over 3 years should get some attention. This is the forecast put out by Standard Chartered:
"We estimate that this would cause total stablecoin supply to rise from $230 billion today to $2 trillion by end-2028," the analysts noted. "This has implications for both U.S. Treasury buying (for reserve purposes) and USD hegemony."
This statement was made back in April, when the stabecoin market was roughly $230 billion. Today, the market cap is over $250 billion. That is roughly a 10% jump in just under 2 months.
At the core of this is the expected passage of the GENIUS act, a bill designed to provide the regulatory framework for the United States. This will allow major institutions such as banks to become stablecoin issuers.
The interconnected global financial system is undergoing a fundamental transformation. Stablecoins, once limited to facilitating crypto trading, have evolved into a versatile medium for value transfer, settlement, and liquidity management, addressing long-standing inefficiencies in traditional finance.
Source
The increased efficiency is what will provide the stimulus for massive adoption. Institutions can easily streamline operations by adopting stablecoins. A fair bit of infrastructure already exists, with blockchains having more than a decade of building.
Traditional financial institutions simply have to build on top of this infrastructure.
A Boom For Crypto-Assets
Stablecoins are the medium of exchange. Crypto-asset such as Ethereum, SUI, Bitcoin, and others will change the structure of the business world.
These can serve a variety of purposes. At the top of the list is value capture.
The point, as it relates to this article, is the fact that growth often comes from exposure. When something is new, the majority of the population is slow to adopt.
Here is a common chart that is spelling out the adoption phase of technology.
Let us be clear: crypto-assets are a new technology. Thus, we are going to see many of the same factors that are associated with other digital advancements.
Stablecoins offer the potential to expose billions to crypto. Once people start to interact with them for payments, it is a small step to purchase some Bitcoin or Ethereum.
A likely path to massive expansion is through the banks. Depending upon what other bills are passed in the United States, it is probable that we see a number of traditional financial institutions offering crypto swapping. The result will be people buying crypto through their banks.
It will bring ease of use to the forefront.
Over time, we will have to monitor the path that is taken. I foresee the growth of decentralized platforms as more people move away from these traditional firms. They are still going to operate with the same motives. Simply put, they are gatekeepers which will keep extracting.
In the stablecoin market, this could mean the parallel rise of "dark" stablecoins. These will not be asset backed, at least in the same way as others. We could see synthetic or algorithmic forms of these coins.
Whatever the form, the stablecoin market is set to explode. It is ironic that most of the world is not talking about this considering the expected rate of growth.
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I really love stablecoin market alot, and I always appreciate your posts too, it is really educative and real, keep it up sir 🙏🙏.
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I see your views friend, I also feel this stable coins will thrive through CBDCs in the future. The fact is, government cloning will keep expanding to secure taxes for themselves. Nevertheless, its presents a big opportunity for the masses as they will help enlighten the public on blockchain tech. A means for the underdogs to also thrive
I think CBDCs will be an epic failure.
Why do you say so?
They might do well within a country by why would a foreign business use a CBDC when that government can not only monitor but cancel the wallet? No company is going to do that.
Yea stable coins are as popular as unstable coins, they are indispensable and are world currency, very valuable, but are very few in number compared to unstable coins
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Exactly, the shift toward using stablecoins as a main payment method shows a major change in the global financial system.
I have two concerns:
One, if in 3 years' time, stablecoin will explode from $230B to $2.8T, I think those who are convinced that the USD is destined to die will be shocked how the stablecoin reversed the tide.
Two, I wonder what the role of an algo stablecoin like HBD would be in such a gigantic expansion of stablecoin.
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Those who believe that the USD is going to die do not understand what they are looking at.
HBD could benefit from the rise of dark stablecoins. It will require more growth of the ecosystem. Could VSC be helping with that?
Yeah, I heard of VSC. I am glad to witness how it will help HBD to grow.
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This is amazing, me being a freelancer understands the growth decentralized platforms has been going through and what we see today is just a drop in the mighty ocean of growth that decentralized platforms is still gonna go through.