The US Department of the Treasury foresees the stablecoin market growing to a market capitalization of $2 trillion by 2028. This projection represents a substantial increase from the current level of around $240 billion. On a similar note, the Chief Operating Officer (COO) of MEXC has expressed that this achievement might occur even earlier, potentially by the following year.
The Treasury Department expressed its positive perspective in the report released by the Treasury Borrowing Advisory Committee (TBAC) on April 30. The report highlighted various factors that are driving the rapid adoption and expansion of stablecoins in the market.
Institutional interest in cryptocurrency products like Bitcoin (BTC) and Ethereum (ETH) Exchange-Traded Funds (ETFs) is on the rise. Stablecoins are prominently utilized in blockchain transactions, particularly as the tokenization of financial assets grows.
Integration of stablecoins by merchants, such as PayPal's acceptance of stablecoins, enhances their functionality as a payment method. The emergence of interest-bearing stablecoins further increases their attractiveness as a store of value and a source of yield.
Moreover, improved regulatory frameworks, including potentially incorporating stablecoins in liquidity management strategies and enabling banks to use public blockchains, could integrate stablecoins into traditional financial systems, driving their significant market expansion.
The current dominance of USD-pegged stablecoins in the market, with Tether (USDT) and Circle's USDC (USDC) leading the way, underscores the potential impact their increasing adoption could have on the banking and Treasury sectors.
Tracy Jin, COO of MEXC, predicts that with more sovereign banks and corporations exploring stablecoin issuance in various fiat currencies and governments emphasizing regulatory clarity, the market capitalization of stablecoins could surpass $2 trillion by 2026.
The ongoing macroeconomic uncertainty is expected to fuel further growth in stablecoin market capitalization, given their role in decentralized finance (DeFi), cross-border payments, and digital asset trading. The stability and liquidity these assets offer during market volatility and liquidity shortages solidify their significance as a core asset for both institutional and retail investors, playing a crucial role in the broader adoption of digital assets.