In a development that is huge for the digital asset sector, stablecoin issuers now represent the 18th largest US Treasury holder, according to a recent Bernstein report. Indeed, the private wealth management firm has noted that the assets as a category are now viewed alongside some of the most dominant sovereign holders.
The report arrives after the circulating supply of all stablecoins has surpassed the $178 billion mark, an all-time high. Moreover, it comes as a host of traditional finance firms are entering the market. Revolut and PayPal are among them, with interest in the asset class only increasing.
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Stablecoin Interest Surging as Bernstein Notes the Asset Has “Decoupled From Crypto:
As an asset class, stablecoins have surged in popularity. This is clearly seen in the success of Tether’s USDT. The asset has seen its market cap surpass $118 billion, according to CoinMarketCap. Moreover, it currently dominates more than 75% of the entire stablecoin market share.
Those figures have influenced a flurry of firms to get in on the digital asset. PayPal launched its PYUSD stablecoin earlier this year. Additionally, Revolut has announced its intention to launch its own stablecoin option. Even crypto mainstay Ripple announced its deviation from XRP and the launch of its RLUSD stablecoin.
That has led to an increased value of the cryptocurrencies. Indeed, stablecoin issues are now the 18th largest US Treasury holder, according to a Bernstein report. The firm described the asset class as “systemically important,” while highlighting their role in granting USD savings access to international individuals.
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This facet only perpetuates the use of digital dollars outside of the US. Bernstein also says that stablecoins have undergone an important change. Specifically, they report that it has decoupled from crypto. These assets are “increasingly being held for non-crypto use cases,” according to the report.
This is certainly a shocking aspect of the token’s development. Historically, stablecoins were seen as a safer entry point for people looking to gain exposure to cryptocurrencies. Now, with cross-border payments and international users, the assets serve a much greater purpose.
“Stablecoins are seeing increasing integration with payments and fintech platforms,” Bernstein added. Therefore, the growth should only continue. There is no telling where the ceiling is, but it is clear that the stablecoin market is set to establish its own growth trajectory in the coming years. So far, its dominance has been undeniable.