Forecast projects a potential boost in stablecoin market value to a staggering $2 trillion by 2028 as reported by the US Treasury.
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Let's dive into the burgeoning world of stablecoins, a segment of the digital asset market that's rapidly expanding, as per the US Treasury's reports released on April 30.
The report predicts a skyrocketing stablecoin market, potentially jumping from its current cap of $234 billion in April 2025 to a staggering $2 trillion by 2028.
This projected growth is fueled by evolving market dynamics and the possibility of regulatory clarification. One such legislative push is the GENIUS Act, which aims to establish clear guidelines for stablecoin regulation in the US, boosting market confidence and triggering widespread adoption.
The GENIUS Act defines "payment stablecoins" as digital assets redeemable at a fixed value, linked to fiat currencies but non-yield-bearing. It also sets out reserve rules for stablecoin issuers.
Early in April, the US House Financial Services Committee endorsed the STABLE Act, empowering the Office of the Comptroller of the Currency (OCC) to oversee and approve federally recognized nonbank payment stablecoin issuers.
The Treasury also speculates that stablecoin reserve requirements could lead to substantial demand for short-term U.S. Treasuries. Projections suggest stablecoin issuers could hold around $1 trillion in T-bills by 2028 if growth targets are reached.
Monthly stablecoin transactions could surge from around $700 billion today to an astounding $6 trillion per month by 2028, equating to about 10% of global forex spot transactions.
If regulatory clarity is achieved, stablecoins could transform into a popular financial instrument not just for cryptocurrency enthusiasts, but for traditional finance, corporate treasury, and even sovereign liquidity management.
For users in developing countries, stablecoins offer direct access to US dollars without the need for a US bank account, reinforcing the greenback's global status, the report noted.
A Closer Look at the Stablecoin Landscape
As of now, the stablecoin market capitalization stands at $244.5 billion, accounting for approximately 8% of the overall crypto market cap, which surpasses the $3 trillion mark, according to Coingecko.
Tether leads the pack with a 61% share and $149 billion in circulation, followed by Circle with $61 billion in USDC circulation, capturing a quarter of the market share. Decentralized USDS (formerly DAI) occupies the third spot with 3% of the market.
PayPal has witnessed significant growth for its PYUSD stablecoin this year, but it stands at less than 0.36% market share. The company teamed up with Coinbase recently to boost the adoption of its dollar-pegged stablecoin.
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- By 2028, the stablecoin market is projected to reach a staggering $2 trillion, as per the US Treasury's reports.
- The GENIUS Act defines "payment stablecoins" as digital assets that are mathematically guaranteed to maintain a fixed value linked to fiat currencies.
- Stablecoins like Tether (USDT) and Circle's USDC are dominating the market, with Tether holding a 61% share and $149 billion in circulation.
- As innovative financial instruments, stablecoins could potentially transform traditional finance, corporate treasury, and even sovereign liquidity management by 2028.
- In the burgeoning world of stablecoins, regulatory clarity, such as that provided by the STABLE Act, could be a significant factor in their widespread adoption.
- The surge in monthly stablecoin transactions to $6 trillion by 2028 could account for about 10% of global forex spot transactions, according to the Treasury's speculations.
