Over the past few days, a host of major developments with respect to stablecoins have taken place. PayPal recently launched a U.S. dollar-backed stablecoin to help foster payments. The new asset, called PayPal USD [PYUSD], has been designed to address the “emerging potential” to transform payments in Web3 and digitally native environments.
Parallelly, The Fed also issued an explanation a few hours ago revealing that the banks under supervision ought to get pre-approvals for engaging with stablecoins. Over the past day, stablecoins worth over $35.3 billion were transacted. The aggregate worth of the stablecoin market stood at $125.582 billion at press time. Owing to the gradual adoption, Berinstein expected the market to be worth almost $3 trillion in 5 years.
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Regulated, On-Shore Stablecoins Will Lead Growth: Bernstein
Gautam Chhugani’s analyst team noted that the integration with consumer platforms will lead to a “growth flywheel” for stablecoins. Consequentially, this will allow them to onboard more users and expand distribution beyond crypto-centric platforms. Furthermore, the report noted,
“We expect major global financial and consumer platforms to issue co-branded stablecoins to power value-exchange on their platforms.”
Several other well-established companies also have stablecoin projects lined up. At the beginning of 2023, a Visa executive indicated that stablecoins could play a meaningful role in the payments division. The payment giant has “a number of initiatives” underway. Additionally, to tap into this trend, even Ripple launched its own platform for the development of stablecoins in Q2 2023.
The Bernstein report highlighted that stablecoins will be fueled by a “hyper-fast financial settlement layer” on public blockchains like Ethereum. Regulated, onshore stablecoins will play a pivotal role in shaping the growth dynamics, the analysts added.