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Stablecoin Market to Soar to Almost $3T in Next 5 Years: Bernstein

That's up from $125 million now as use should grow with more co-branded partnerships, a report from the firm said.

Updated Apr 9, 2024, 11:08 p.m. Published Aug 9, 2023, 9:33 a.m.
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The stablecoin market is expected to grow to $2.8 trillion in the next five years from $125 billion now, broker Bernstein said in a research report Wednesday.

Integration with consumer platforms will lead to a “growth flywheel” for stablecoins — a type of cryptocurrency that's typically pegged to the U.S. dollar — allowing issuers to capture users and expand distribution beyond crypto native platforms, the report said.

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“We expect major global financial and consumer platforms to issue co-branded stablecoins to power value-exchange on their platforms,” analysts led by Gautam Chhugani wrote.

Just this week, payments giant PayPal (PYPL) said it is entering the crypto market with its own dollar-pegged stablecoin, . This is a first for a major financial company. The Ethereum-based token will be available first on PayPal and then on Venmo, and can be exchanged for dollars at any time.

Stablecoins will be powered by a “hyper-fast financial settlement layer (layer 2 or centralized consumer platforms)” on public blockchains such as Ethereum, the note said.

Growth will be led by “regulated, onshore stablecoins," the analysts wrote.

“Stablecoin regulation enjoys more political support than crypto regulation,” with multiple jurisdictions including Singapore, Hong Kong and Japan, all launching pilot projects for stablecoins and central bank digital currencies, the report added.

Read more: Tokenization Could Be a $5T Opportunity Led by Stablecoins and CBDCs: Bernstein

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