- The experts are predicting that M2 and FX transactions might expand to 10% of the US money supply.
- Implications for the wider financial ecosystem of stablecoin adoption were also brought to light in the analysis.
Stablecoins, which have a present market valuation of less than $200 billion, are a negligible part of the world’s monetary transactions, accounting for less than one percent of the US currency supply and FX operations.
Nevertheless, according to a report that was co-authored by Standard Chartered and Zodia Markets, there is a great deal of room for development. The experts are predicting that M2 and FX transactions might expand to 10% of the US money supply.
The report titled “Stablecoins: The First Killer App” claims that stablecoins’ usefulness has expanded well beyond their initial use in crypto trading. From its humble beginnings as a trading bridge asset. Stablecoins have found widespread usage in international money transfers, payroll, trade settlements, and remittances.
Regulation Critical
High fees, long processing times, and restricted access in underprivileged regions are just some of the problems that these applications show how current banking institutions are inefficient. Stablecoins are establishing themselves as a crucial instrument in contemporary finance by offering a desirable alternative to traditional payment methods. Such as foreign remittances and corporate transactions, which are both time-consuming and expensive.
Implications for the wider financial ecosystem of stablecoin adoption were also brought to light in the analysis. Nevertheless, if they were to reach 10% market share, they would become a major player in the global financial industry. And alter the course of digital payments and settlements.
To facilitate this change, regulation is considered essential. According to the research, a Trump-led administration in 2025 may make stablecoin-specific policies a priority. Despite the fact that past US governments have failed to do so. It is believed that stablecoins will be able to develop and diversify their use cases to their fullest potential once regulations are clarified.
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