Stablecoins are poised for mainstream integration in 2025 as the U.S. administration continues to advance significant cryptocurrency legislation, states a new research report from Deutsche Bank.
Despite encountering some resistance in the Senate last week, Deutsche Bank remains optimistic about regulatory advancements this year.
Summary of Findings:
- Stablecoins are expected to gain significant traction this year, according to Deutsche Bank.
- The report emphasizes that stablecoins are evolving as strategic financial assets, enhancing the dominance of the dollar.
Stablecoins are cryptocurrencies linked to stable assets like the U.S. dollar or gold, playing a crucial role in the rapidly growing cryptocurrency market and facilitating international monetary transfers.
The proposed Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act aims to enforce federal regulations on stablecoins with market caps over $10 billion, while the STABLE Act from the House of Representatives advocates for state-level oversight unconditionally.
Over the past five years, the total cap for stablecoins soared to $246 billion, a massive increase from $20 billion in 2020, as noted by the German bank.
Currently, Tether’s USDT holds a dominant market cap of about $150 billion.
Stablecoins are integral to over two-thirds of cryptocurrency trading, offering unparalleled speed and low-cost transactions, noted analysts Marion Laboure and Camilla Siazon.
Stablecoins are set to become important economic assets, especially as 83% are pegged to the U.S. dollar, reinforcing dollar supremacy in a diverse global market.
The Genius Act is projected for approval in the U.S. soon, which could catalyze an near-tenfold increase in the stablecoin supply as predicted by investment bank Standard Chartered.
For further insights, read more about how stablecoins may evolve into essential components of the mainstream economy by Citi here.
