Stablecoin Market Cap Hits $200B Milestone, Could Double by 2025 as Adoption Accelerates

The burgeoning stablecoin market hit another milestone on Wednesday, surpassing the $200 billion total market value mark for the first time as demand intensifies and adoption expands for the assets.

The asset class as a whole has added $10 billion in market value in just two weeks since surpassed the 2022 bull cycle record of $190 billion, according to CCData and DefiLlama.

Stablecoins are cryptocurrencies designed to hold a constant price, usually pegged to the US dollar. They are a key piece of infrastructure for the digital assets space, serving as the main source of liquidity for trading crypto assets on the exchange and transferring the value of the blockchain rail.

Demand for stablecoins has grown steadily over the past year as crypto markets emerged from a brutal bear market. Growth significantly accelerated after Donald Trump’s election victory last month, adding $30 billion in supply as investors poured funds into cryptocurrencies in a frenzy.

Tether’s USDT, the most popular stablecoin, has reached a record supply of $139 billion, up 12% in a month, DefiLlama data shows. USDT was recognized as an accepted virtual asset by the Abu Dhabi Global Market (ADGM) earlier this week, and the issuer aims to expand its services throughout the Middle East region.

Circle’s USDC, the second largest in the asset class, also grew 9% to nearly $41 billion in market value over the same period. Circle recently partnered with Binance, the world’s largest crypto exchange by trading volume, to drive USDC adoption worldwide.

It’s not just the emerging crypto market that’s driving growth, though.

there evidence for increasing the use of stablecoin for payments, remittances and savings, especially in developing countries with rapidly depreciating local currency and weak financial systems. An indicator of stablecoin adoption for non-crypto use cases is the rapidly growing number of stablecoin transactions in transfer applications including peer-to-peer payment platforms, Nik Milanovic, partner at venture capital firm Fintech Fund, pointed to a X post.

Tokenized products with stable prices that offer this to investors are also in vogue. said Athena The dollar-backed USDe token, which generates income by shorting bitcoin and ether perpetuals that farm the funding rate, has surged to $5 billion, up 90% in a month, according to DefiLlama data. The future decentralized finance (DeFi) protocol Usual’s stablecoin zoomed to $700 million, doubling in size over the same period.

The market cap will double by 2025

Growth is likely to continue next year, with digital asset manager Bitwise predicting the stablecoin market will reach $400 billion by 2025. According to a Tuesday reportone of the main factors may be the US Congress passing the long-awaited stablecoin legislation that defines the rules for businesses and institutions to issue and interact with tokens.

“Clear answers to the big questions—Who regulates them? What are the right reserve requirements?—will spark a lot of new interest among issuers, consumers, and businesses,” Bitwise analysts letter. “When that happens, expect some big traditional banks like JP Morgan and others to enter the space.”

Other growth catalysts include popular fintech applications integrating stablecoins into their services following the example of Paypal with its PYUSD stablecoin, and the growing role of stablecoins in global payments and remittances, the report added.

Bitwise is not the only one to come out with bullish projections for stablecoins. Standard Chartered and Zodia Markets foretold in a report last month that stablecoins could reach the equivalent of 10% of the US money supply and foreign exchange transactions, up from the current 1%.