Stablecoins are cryptocurrencies designed to maintain price stability by being pegged to traditional currencies, such as the US dollar. They have significantly transformed global payments over the past few years.
The Rise of Stablecoins in the New Digital Economy
The total stablecoin market cap exceeded $260 billion, a significant increase from $5 billion in 2019. In 2024, stablecoins handled over $35 trillion in on-chain transactions, surpassing the annual volume of the traditional payment giant Visa. Their appeal lies in combining the stability of traditional money with the speed of crypto transactions, making them useful for users in emerging Asian markets utilizing stablecoins for remittances.
Expansion of Stablecoin Usage Beyond Ethereum
Between 2014 and 2017, stablecoin issuers like USDC and DAI launched on Ethereum due to its security and activity in DeFi. However, high fees have encouraged users to look for cheaper alternatives. Currently, the Tron network is capturing the attention of stablecoin issuers, holding over $80 billion in USDT, which significantly surpasses Ethereum's volumes.
Corporate Integration Fuels Stablecoin Growth
Major companies have started integrating stablecoins into their operations. For example, PayPal released PYUSD, a dollar-backed token used for international transfers. Visa also employs stablecoins in its operations, using USDC to expedite transactions. Research suggests that in the near future, businesses may start using stablecoins as part of their treasury for instant payments.
The growth of stablecoins underscores their significance in the digital economy. Establishing regulatory frameworks, such as the GENIUS ACT in the US, could further enhance the adoption of these tokens.
