Stablecoins are no longer an experiment: what this means

Stablecoins satisfy a strong market demand because they solve a real world problem. One could argue that this is the single biggest blockchain innovation to reach product market fit with much more room for growth.

This is a convenient conclusion because the stablecoins market is still under $300 billion. According to data from RWA.xyz, the total value of stablecoins is at $237.48B.

Even if we are to estimate that a couple of smaller markets are not accounted for, especially non-USD stablecoins, we still likely wouldn't cross the $250 billion mark. This shows that so much of global markets are underexposed and that is an incentive.

That said, as aforementioned, the stablecoin market solves real problems and this is evident in the economic volumes it's pulled in the last year alone.

Stablecoins, which play a major role in the global cryptocurrency ecosystem, saw massive adoption in 2024, with their transfer volumes beating those of Visa and Mastercard combined.

The annual stablecoin transfer volume reached $27.6 trillion last year, surpassing the combined volumes of Visa and Mastercard by 7.7%, according to a Jan. 31 report by crypto exchange CEX.io.

One of the major catalysts amplifying stablecoin transfer volume has been the increased use of bots, especially on Solana and Base, CEX.io lead analyst Illia Otychenko said. — Cointelegraph report

A question that needs being asked is: if under $250 billion in stablecoins liquidity can pull volumes as large as $27.6 trillion annually, how much would be moved through stablecoins if the masses came onboard and what revenue would be generated in the process?

What we are looking here isn't just trade volumes, because that undoubtedly makes up the majority of stablecoins volumes right now.

We are looking at payments, which would generally mean a churn of what Visa and Mastercard processes in addition to solutions like PayPal, Venmo, Stripe, et cetera.

When we consider that with stablecoins, a lot of frictions from regulatory restrictions or simply cost of service expansion, is essentially eliminated, we are looking at a really huge market.

Currently, Tether dominates this market and based on recent reports on valuation analysis, people believe a company as Tether would be valued over $515 billion in the public traditional market and potentially hit above the $1 trillion mark later.

Paolo Ardoino, Tether’s CEO commented on this, saying that the company doesn't have a need to go public and that the “$515b valuation” is a bit bearish considering growing Bitcoin and gold treasury.

By bearish, does it mean it should be much higher initially? The report does suggest that:

Ardoino addressed valuation speculation raised by Artmesis CEO Jon Ma, who claimed that if Tether, which is behind the stablecoin USDT, were to go public, it would rank as the 19th largest company globally with a valuation of $515 billion, larger than multinational giants like Costco and Coca-Cola.

While Ardoino called the $515 billion valuation a “beautiful number,” he said it might actually be too low. “Maybe a bit bearish considering our current (and increasing) Bitcoin + gold treasury, yet I’m very humbled,” Ardoino said. — Cointelegraph report

Stablecoins: no longer an experiment

In a separate report, this was a comment made by the Global Head of Payments, Exchanges & Real World Assets at Polygon, Aishwary Gupta.

Gupta highlights PayPal’s stablecoin growth to $1 billion market capitalization and Stripe’s move to let businesses accept USDC on Polygon as a strong message to the market saying: “Hey, this isn’t just an experiment anymore.” Crypto.news reports

Of course, we've seen enough developments and stories this year alone to come to a similar conclusion as Gupta. Some of the biggest banks in the United States are reportedly in talks to jointly launch a stablecoin. This all points to a great fact that stablecoins are uniquely positioned to revolunize finance and it's an urgency for these companies to adjust to it and capitalize on the significant incentive that remains as the masses are still underexposed.

Posted Using INLEO