Stablecoins are on the cusp of mainstream adoption, bolstered by the Trump administration’s ongoing efforts to pass landmark crypto legislation, according to a recent research report by Deutsche Bank.
While some resistance was encountered in the Senate last week, the investment bank remains optimistic about progress in stablecoin regulation this year.
Stablecoins, digital currencies tied to assets like the U.S. dollar or gold, have become vital players in the cryptocurrency markets. They facilitate fast, low-cost, and borderless transactions, playing a key role in the transfer of money globally.
The Senate’s proposed Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act outlines federal regulation for stablecoins with a market capitalization exceeding $10 billion, along with provisions for state regulation in alignment with federal guidelines. Meanwhile, the House of Representatives has introduced the STABLE Act, which calls for state-level regulation without federal preconditions.
The total market capitalization of stablecoins has surged in recent years, reaching $246 billion today, up from just $20 billion in 2020. Tether’s USDT, the largest stablecoin, commands a market cap of around $150 billion.
According to Deutsche Bank analysts Marion Laboure and Camilla Siazon, stablecoins now facilitate more than two-thirds of all cryptocurrency trading, providing unparalleled speed, round-the-clock access, and cost-efficient, programmable payments.
The report highlights that stablecoins are increasingly seen as strategic assets. With 83% of them pegged to the U.S. dollar, and Tether being one of the largest holders of U.S. Treasuries, they are playing a significant role in reinforcing the dominance of the dollar in a shifting global economy.
The GENIUS Act is expected to pass in the coming months, and according to research by Standard Chartered, this could lead to a nearly tenfold increase in the supply of stablecoins, further cementing their importance in the financial ecosystem.
