Over the past decade, the evolution of stablecoins has accelerated at an extraordinary pace, reshaping the financial services landscape in ways few could have anticipated. This report offers an in-depth look at the transformative role stablecoins are now playing across payments, trade, savings, and the broader tokenisation of assets, and examines how this will shape the future role of digital asset custodians.
Stablecoins are revolutionising the financial landscape, bridging the gap between traditional money and digital assets with unparalleled efficiency, speed and global accessibility. A decade into their existence, they are increasingly becoming lynchpins of the digital asset market, as well as expanding beyond it. According to Bloomberg, stablecoins’ overall market capitalisation increased by a staggering 46% in 2024. While, at the time of writing, there are $241bn worth of stablecoins in circulation, this is just the tip of the iceberg, as most global financial institutions have not yet entered the market in force.
“The launch of the PayPal USD product put stablecoins on the agenda of TradFi.”– Ramy Soliman, Stablecoin Standard
“As a prudentially regulated issuer, it’s probably never been a more exciting time for the stablecoin market. What we saw pre-Trump was the adoption of stablecoins predominantly for exchange trading activity. What’s interesting since Trump, is the significant increase in the number of non-crypto native, financial firms looking to
leverage the utility that stablecoins bring to otherwise non-crypto-centric use cases, such as cross-border payments. Big central players are getting comfortable with the technology and therefore harnessing this potential upgrade to the financial system.”– Guillaume Kendall, Paxos
“CBDCs aren’t the answer because they won’t work cross border. To network up 180 different currencies bilaterally is 16,100 connections. You’d have to decide who you’re going to leave behind.”– Nick Philpott, Zodia Markets
“In Europe, we are working towards a blend of fiat and stablecoins because, for certain purposes, the regular traditional payment rails are good and they’re improving fast. There’s no point competing in Europe for retail payments, unless it is for microtransactions, where we have a good use case. But other than that, speed is not really a factor there, so stablecoins can only deliver an incremental benefit”– Arnoud Star Busmann, Quantoz Payments
“The removal of SAB21 enables regulated players in the US to enter the custody space. Although it will mean more competition, it’s a massive increase in the pie which further legitimises TradFi participation.”– Geoffrey Kendrick, Standard Chartered
The Future Outlook for Stablecoins
A whole variety of stablecoin products look set to play a fundamental role in payments innovation, financial markets and the broader tokenisation movement. With regulatory clarity improving and institutions entering the space, their adoption is expected to expand further, particularly in cross-border trade, programmable finance, and AI-driven transactions.
In future, it is likely that stablecoins will be part of a much stronger convergence between traditional finance and digital assets. They will also enhance the world of payments, offering new ways to automate activities to the benefit of both consumers and payments providers, and will provide new yield-generating capabilities. Last but not least, the role of artificial intelligence in finance will make stablecoins the killer app for facilitating automated financial transactions.