A joint report by Standard Chartered and Zodia Markets forecasts that stablecoins will account for 10% of the total US money supply and foreign exchange (FX) transactions in the near future, up from just 1% today. The report, titled Stablecoins: The First Killer App, highlights the rapid growth potential of stablecoins as they evolve from a niche cryptocurrency asset to a mainstream financial tool.
Currently, stablecoins make up a modest fraction of global financial transactions, but the report predicts significant growth following the potential arrival of Donald Trump as U.S. president in 2025. The research suggests that regulatory clarity will play a crucial role in accelerating the adoption and usage of stablecoins, particularly as a bridge for cross-border payments and FX-equivalent transactions.
The report notes that while stablecoins currently represent just 1% of the US M2 money supply and FX transactions, these figures could increase substantially with proper regulation. A critical driver of this shift would be the establishment of clearer regulations, which could help stabilize the market and build trust with users. Several bills aimed at regulating stablecoins were introduced during the Biden administration but saw limited progress. However, the report anticipates more substantial regulatory advancements under a potential Trump administration, starting in 2025.
Regulation and New Use Cases Key to Stablecoin Growth
The report emphasizes that regulation is key to unlocking stablecoins’ full potential. Beyond their original use in the cryptocurrency space, stablecoins are now being increasingly adopted for a wide range of financial applications, including cross-border payments, payroll, trade settlements, and remittances. These new use cases demonstrate stablecoins’ ability to address inefficiencies in existing financial systems, such as high transaction costs, delays, and limited access in developing countries.
Stablecoins offer faster and cheaper transactions, making them an attractive solution for international remittances and business operations. As their utility continues to expand, they are becoming an important tool in the modern financial landscape, with the potential to transform how money moves across borders and throughout the global economy.
With the growing interest and demand for efficient financial solutions, the adoption of stablecoins is poised for significant growth in the coming years. The regulatory environment will be a decisive factor in determining how quickly stablecoins can move from a niche asset to a mainstream tool, potentially reshaping the future of finance.
