Digital Dollar Report: Stablecoins Face Important Development Opportunities

In April 2025, a well-known research institution released a research report on the digital dollar. The report pointed out:

The year 2025 may become a key year for the application of blockchain in the financial and public sectors, driven mainly by regulatory changes.

By 2030, the total circulating supply of stablecoins is expected to reach $1.6 trillion under baseline conditions; it could increase to $3.7 trillion in optimistic scenarios and about $500 billion in pessimistic scenarios.

The supply of stablecoins is expected to remain predominantly denominated in dollars, approximately 90%, while non-U.S. countries will promote the development of their own central bank digital currencies, CBDCs.

The regulatory framework for stablecoins in the United States may drive new demand for U.S. Treasuries, and by 2030, stablecoin issuers could become one of the major holders of U.S. Treasuries.

Stablecoins pose a certain challenge to the traditional banking system by replacing part of the deposits. However, they may also provide new service opportunities for banks and financial institutions.

How Stablecoins Work

A stablecoin is a cryptocurrency designed to maintain a stable value by being pegged to a reference asset. These reference assets can include fiat currencies like the US dollar, commodities like gold, or a basket of financial instruments. Key components of a stablecoin system include:

• Stablecoin Issuer: Responsible for issuing stablecoins and maintaining their price peg by holding an equivalent amount of underlying assets.

• Blockchain ledger: records stablecoin transactions, providing transparency and security.

• Reserves and Collateral: Ensuring that each token can be redeemed at its pegged value. For stablecoins backed by fiat currency, reserves typically include cash, short-term government bonds, and other liquid assets.

• Digital wallet providers: offer wallet services for storing, sending, and receiving stablecoins.

Overview of Major Stablecoins

As of April 2025, the total circulating supply of stablecoins has exceeded $230 billion, an increase of 54% compared to the same period last year. The top two stablecoins dominate this ecosystem, with a market share of over 90%.

In recent years, the trading volume of stablecoins has grown rapidly. In the first quarter of 2025, the adjusted monthly trading volume is between $650 billion and $700 billion, approximately double the levels from the second half of 2021 to the first half of 2024. Supporting the crypto ecosystem is the main application scenario for stablecoins.

Factors Driving the Adoption of Stablecoins

Practical advantages: fast speed, low cost, available around the clock, creating demand in both developed and emerging economies.

Macroeconomic Demand: In some countries with significant currency fluctuations, consumers use stablecoins to protect their funds. An increasing number of remittances are conducted in the form of stablecoins.

Support and integration of existing financial institutions: conducive to the legalization and large-scale application of stablecoins.

Regulatory clarity: Enables banks and the broader financial services industry to adopt stablecoins in retail and wholesale activities.

User experience improvement: Any organization that can enhance customer experience is likely to stand out in their respective fields. The integration with existing payment methods will drive the next wave of popularity.

Innovation and Efficiency: Institutions need to view stablecoins as tools for achieving more flexible product development, providing more convenient and attractive services.

Potential Market Size of Stablecoins

Research institutions estimate that the baseline scenario for the stablecoin market size in 2030 will be $1.6 trillion, the optimistic scenario will be $3.7 trillion, and the pessimistic scenario will be $0.5 trillion. This prediction is based on the following factors:

• Some dollars are shifting from cash to stablecoins
• Families and businesses are reallocating some short-term liquidity to stablecoins.
• Growth of the public cryptocurrency market

Main Use Cases of Stablecoins

1. Cryptocurrency trading: Currently the largest application scenario, accounting for 90-95% of stablecoin trading volume.

2. Business-to-Business Payments: Especially when conducting business with low-income and middle-income countries, stablecoins can improve efficiency.

3. Consumer remittances: Expected to capture a significant share of the approximately $1 trillion remittance market.

4. Institutional trading and capital markets: used for professional investors or tokenized securities trading settlement.

5. Interbank liquidity and fund management: Although the proportion is relatively small, the potential impact is significant.

The Relationship Between Stablecoins and Traditional Financial Systems

The stablecoin market may undergo an evolution similar to that of the bank card industry. Stricter regulations and high cost requirements may lead to centralization among issuers. Many countries may develop their own central bank digital currencies ( CBDC ) as a tool for national strategic autonomy.

For banks, stablecoins are both a challenge and an opportunity. They may affect the banks' deposit base and lending capacity, but they also create new business opportunities for banks, such as directly issuing stablecoins and providing related payment solutions.

Overall, stablecoins are迎来重要的发展机遇, but their long-term impact remains to be further observed and studied.