Stablecoins with golden eggs. Cryptocurrencies based on assets deemed stable, such as the US dollar, are one of the hottest topics in the cryptosphere. Not only because financial regulators are attacking them on the pretext of « stability risks » for the fiat currencies underlying its stablecoins. But also because more and more very large companies/banks are looking for their own stablecoin. By the way, PayPal’s PYUSD stablecoin is a very recent example. The Bernstein sees in all this a very promising market.
« Stable » cryptos: a $3 trillion market within 5 years?
If central bankers are chasing their central bank digital currency (MNBC), the big companies and commercial banks are seeking to set up their own stablecoin houselike Société Générale’s FORGE subsidiary (in April 2023) or most recently PayPal and its PYUSD.
And a new report from the analysts of Bernstein confirms this future optimistic for stablecoins. Indeed, experts predict that the stablecoin market could reach the 2,800 billion by 2028. By way of comparison market cap (the total valuation) of the cryptocurrency sector is currently $1,230 billion (Bitcoin and all altcoins and stablecoins included, therefore). As for stablecoins, onlytheir current combined value is 125 billion dollars.
« We expect that the main platforms global financial and consumer companies issue branded stablecoins to boost the exchange of value on their platforms. »
Excerpt from Bernstein’s report
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A gigantic adoption that would see +2,000% stablecoins in 2028?
Even if the experts are talking about public blockchains, such as Ethereum (ETH) or its second-layer solutions (layer 2), this growth – which involves institutional players – will not take place without a notable regulations in this sector.
So, for Bernstein’s experts, it’s mainly the regulated stablecoins that will make the biggest breakthrough. They are the ones who could well bring this market to trillions of dollars, by bringing the very wealthy institutional investors to use them.
« The regulation of stablecoins enjoys greater political support than cryptocurrencies in general. (…) Multiple jurisdictions, including Singapore, Hong Kong and Japan, have all launched pilot projects for stablecoins and MNBCs. »
Excerpt from Bernstein’s report
While stablecoins are clearly a popular great enthusiasm of Bernstein’s teams today, the king of cryptos – Bitcoin (BTC) – is not far from their hearts. Just a few months ago (in April 2023), the same experts led by Gautam Chhugani (chief analyst at Bernstein) talk aboutan accelerated « hyper-bitcoinization » of financeespecially if traditional banks and players continue to experience setbacks (such as the collapse of Silicon Valley Bank in March 2023).
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