Global Stablecoin Supply to Reach $1 Trillion by 2025
Stablecoin Adoption on the Rise
CoinFund managing partner David Pakman has predicted that the global stablecoin supply could surge to $1 trillion by the end of 2025, potentially becoming a key catalyst for broader cryptocurrency market growth.
Pakman stated, "We’re in a stablecoin adoption upswell that’s likely to increase dramatically this year. We could go from $225 billion stablecoins to $1 trillion just this calendar year."
Impact on Blockchain-Based Finance
This significant growth, while modest compared to global financial markets, would represent a "meaningfully significant" shift for blockchain-based finance.
Growing Interest in Exchange-Traded Funds (ETFs)
Pakman also suggested that the rise in capital flowing onchain, combined with growing interest in exchange-traded funds (ETFs), could further support decentralized finance (DeFi) activity.
"If we have a moment this year where ETFs are permitted to provide staking rewards or yield to holders, that unlocks really meaningful uplift in DeFi activity, broadly defined," he said.
Stablecoin Payment Adoption on the Rise
Stablecoins are increasingly being used for daily payments, illustrating the efficacy of blockchain-based transactions.
"We’re up over 22x in stablecoin volume since 2021," Pakman said, adding, "We’ve seen a significant decrease in the size of each stablecoin transaction, which points to the fact that they are being used more as payments and less for large transfers."
Conclusion
In conclusion, the global stablecoin supply is expected to reach $1 trillion by the end of 2025, driven by the growing adoption of stablecoins for daily payments and the potential for exchange-traded funds to provide staking rewards or yield to holders. This significant growth could have a profound impact on blockchain-based finance and decentralized finance.
FAQs
Q: What is the current stablecoin supply?
A: The aggregate stablecoin supply stood at an all-time high of above $208 billion across the five largest stablecoins on March 28, according to Glassnode data.
Q: How is the growth of stablecoins affecting the cryptocurrency market?
A: The growth of stablecoins is expected to have a significant impact on the cryptocurrency market, potentially becoming a key catalyst for broader market growth.
Q: What is the potential impact of exchange-traded funds (ETFs) on decentralized finance (DeFi) activity?
A: The potential for ETFs to provide staking rewards or yield to holders could unlock "really meaningful uplift" in DeFi activity, according to Pakman.
