“Content”, — write: www.coindesk.com
Currently, the stablecoin market is equivalent to 1% of U.S. M2 and 1% of foreign exchange transactions, the report said.
“As the sector becomes legitimized, a move to 10% on each measure is feasible,” wrote authors Geoff Kendrick and Nick Philpott.
A stablecoin is a type of crypto that is designed to hold a steady value and is usually pegged to the U.S. dollar, though some other currencies such as gold are also used. M2 is a measure of U.S. money supply, and includes cash, savings and other short-term investments.
The catalyst for this surge in adoption will be U.S. regulation of stablecoins, the authors said, adding that cross-border payments and FX-equivalent transactions are key areas of growth.
Three bills were brought forward during Joe Biden’s administration but scant progress was made, the report noted, adding that more success on the regulatory front is expected when Donald Trump’s administration takes over in early 2025.
Bernstein said that stablecoins were becoming more important to the global financial system, and constitute the 18th-largest holder of U.S. Treasuries, the broker said in a research report in September.
Read more: Stablecoins Are Becoming Systemically Important, Bernstein Says
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