With the increasing demand for stablecoins and their adoption expanding, the total market value of stablecoins surpassed the $200 billion mark for the first time on Wednesday. According to data from CCData and DefiLlama, stablecoins have grown by $10 billion in market value in just two weeks since breaking the $190 billion record set during the bull market cycle of 2022.
As the cryptocurrency market emerges from a bear market, the demand for stablecoins has steadily increased over the past year. The growth rate of stablecoins significantly accelerated after the victory of Donald Trump in the presidential election last month, with the supply increasing by nearly $30 billion since November 6th.
Data from DefiLlama shows that the largest stablecoin by market value is Tether’s USDT, with a record supply of around $140 billion, growing by approximately 12% in a month. On December 10th, Tether announced that the Financial Services Regulatory Authority (FSRA) in Abu Dhabi had accepted USDT as an “Approved Virtual Asset” (AVA) for the Abu Dhabi Global Market (ADGM).
The second-largest stablecoin by market value is USDC issued by Circle, which has also grown by about 12% in the past month to around $41.6 billion. Circle recently established a new strategic partnership with the cryptocurrency exchange Binance to promote the global adoption of USDC.
The actual use of stablecoins for payments, savings, and other purposes has also helped drive their growth. A report published in September this year indicated that stablecoins are increasingly being used for payments, remittances, and savings, especially in developing countries with rapidly depreciating local currencies and fragile financial systems. Nik Milanovic, a partner at Fintech Fund, pointed out that stablecoin transactions on transfer applications, including peer-to-peer payment platforms, are rapidly increasing.
Stablecoins that offer price stability and yield-generating tokenized products are also gaining popularity. According to DefiLlama data, USDe issued by the stablecoin protocol Ethena has seen a nearly 88% growth in market value in a month by shorting Bitcoin (BTC) and Ethereum (ETH) perpetual contracts to generate income from funding rates, reaching $5.6 billion to become the third-largest stablecoin. The stablecoin USD0 from the emerging decentralized finance (DeFi) protocol Usual has surged to $790 million, doubling in size during the same period.
Bitwise predicts that the market value of stablecoins will double next year
Digital asset management company Bitwise predicted in a report released on Tuesday that the market size of stablecoins will reach $400 billion by 2025, with a key catalyst potentially being the long-awaited stablecoin legislation passed by the U.S. Congress, defining rules for issuing stablecoins and interacting with them.
The report also mentioned other growth catalysts, including popular fintech applications integrating stablecoins into their services, similar to Paypal’s PYUSD stablecoin, and the increasing importance of stablecoins in global payments and remittances. Not only Bitwise has a positive outlook on stablecoins, but Standard Chartered Bank and its digital asset brokerage Zodia Markets predicted in a report last month that the adoption of stablecoins will significantly increase, potentially accounting for 10% of U.S. M2 transactions. Source: CCData.
