Cryptocurrencies

Stablecoins could ultimately represent 10% of the “global economic currency”

Stablecoins could represent 10% of “the world’s economic currency” over the next 10 years or more, according to Jeremy Allaire, CEO of stablecoin issuer Circle.

This is arguably a bold claim, but Allaire highlighted several factors that could lead to a massive expansion of stablecoin adoption over the “next 10+ years.”

“Most major global payment companies are actively using this technology and are exploring how to expand its use as the benefits of public chains and stablecoins become clear to all,” Allaire explained in a June 19 article.

The size of the addressable market is in the “billions,” Allaire said, and unleashing the digital dollar on blockchains could deliver on the promise of banking services for the unbanked, reducing remittance costs and enabling commerce. seamless cross-border.

Source: Jérémie Allaire

He noted that stablecoins are becoming an increasingly accepted form of digital currency and that stablecoins will represent an “increasingly significant portion” of the $100 trillion global e-currency market by end of 2025.

“What does it look like when 10% of the world’s economic currency is stablecoins and credit intermediation shifts from fractional reserve loans to online credit markets?

“(This) can be achieved in the next 10 years,” Allaire said.

Data from the World Population Review shows that the $162 billion stablecoin market currently represents 0.2% of the size of the $80 trillion money market.

Savings, money market, and checking accounts account for approximately $26.4 trillion, $25 trillion, and $23.6 trillion, respectively, while the remaining $5 trillion comes from the Mint.

For Allaire’s prediction of 10% by 2034 to be realized, the stablecoin market would need to grow at least at a CAGR of 47.7%, although the estimate does not take into account growth of 80 trillion US dollars.

Data from CoinGecko shows that USD Coin (USDC) – the US dollar stablecoin issued by Allaire’s Circle – currently has a market capitalization of $32.8 billion, making it the second-largest stablecoin after Tether (USDT ).

USDC, USDT, PayPal USD (PYUSD) and USDP stablecoin (USDP) stablecoin transaction volume since January 2023. Source: Visa

about: Could stablecoin volumes surpass Visa volumes this quarter?

Allaire’s optimism is not limited to the stablecoin market either.

Cryptocurrency adoption could reach “billions of users” across “millions of applications” over the next decade or more as more trading and finance takes place via smart contracts on public blockchain infrastructure.

He even estimates that certain chains could outperform certain multinationals during this period – without specifying how or in which sectors.

review: The Real Risks for the Ethena Stablecoin Model (Not the One You Think)

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