- Stablecoin turnover has increased.
- This comes as the digital tokens find new use cases.
- Companies — including banks — are integrating stablecoins into their products.
Stablecoins are changing hands more than ever, with the market looking set to grow five times over to be worth $2 trillion by 2028, according to new research from British bank Standard Chartered.
The new report also notes that stablecoins have found more use cases, which has drummed up velocity, the rate the digital tokens are turned over.
“Overall stablecoin velocity has doubled over the past two years, with stablecoins now turning over six times a month on average,” the report authored by Geoff Kendrick, the global head of digital assets research at the bank, read.
Stablecoins changing hands more often means that the tokens — typically pegged to the value of the dollar — are being used more widely.
Since US President Trump signed the Genius Act last year, major companies and banks are debuting or researching their own stablecoins with the hope the biggest crypto application will speed up payments. This has sped up the merger of traditional finance and blockchain-based businesses.
Stablecoins proving useful
Stablecoins were originally used by traders to buy and sell crypto without having to use traditional financial rails, in decentralised finance applications, or by those in the developing world to hedge against a collapsing currency.
But that’s changing, Standard Chartered’s report said. Now, burgeoning artificial intelligence payments and stablecoins replacing traditional finance uses are leading to surging transactions.
“The good news is that these new use cases are, so far, additive to overall stablecoin transactions,” the report continued.
The report noted that the bank’s prediction for the market value of stablecoins to hit $2 trillion by the end of 2028 still stands, but increased velocity could hinder this growth if those more use cases hadn’t been added to the mix.
Stablecoins are currently a $315.5 billion market, according to DefiLlama data.
Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.
