Stablecoin Market Expands Rapidly in 2023 Amid Limited Global Regulation
Summary:
The global stablecoin sector, which includes cryptocurrencies such as Tether (USDT) and USDC (USDC), experienced significant growth in 2023. Despite this, only six countries - The Bahamas, The Cayman Islands, Gibraltar, Japan, Mauritius, and Switzerland - have introduced stablecoin regulation, according to the PwC Global Crypto Regulation Report 2023. Powerhouse nations like the United States and the United Kingdom have not yet established final legislation for stablecoins. The stablecoin market value has soared, addicting billions in 2023. CoinGecko data shows that the total stablecoin market capitalization has hit new record highs, peaking at $131 billion.
The stablecoin sector, which includes cryptocurrencies such as Tether (USDT) and USDC (USDC), has experienced significant expansion over the last year, reaching record market values in 2023. However, according to a recent study, regulatory oversight on this booming market has been introduced by only a handful of nations. The PwC Global Crypto Regulation Report 2023, published on December 19, states that only six nations, namely The Bahamas, The Cayman Islands, Gibraltar, Japan, Mauritius and Switzerland, had enacted stablecoin laws or regulations in 2023, based on PwC’s regulatory analysis.
All the nations that have adopted stablecoin legislation have also implemented the other regulations reviewed, including a crypto regulatory framework, Anti-Money Laundering (AML) measures and the Financial Action Task Force's Travel Rule, the research mentioned. In PwC's latest crypto regulatory report, the service company evaluated the status of crypto rules in 35 countries, including powerhouse nations like the United States and the United Kingdom. The report suggests that these nations have yet to put into place a final legal stance on stablecoins or establish a crypto regulatory framework.
According to the study, 40% of the nations examined, which equates to 14 jurisdictions, have not begun any form of stablecoin regulation. These countries include Denmark, Estonia, France, Germany, Taiwan, as well as Turkey. 25% of the jurisdictions surveyed, such as Hong Kong and Italy, have started the stablecoin regulation process or have provided a roadmap, while only approximately 9% of countries such as the United Arab Emirates, are finalizing stablecoin laws.
Three countries, namely mainland China, Qatar and Saudi Arabia, have banned the use of cryptocurrencies, PwC's report highlighted. Stablecoins play a crucial role within the cryptocurrency ecosystem, with Tether stablecoin topping the ranks as the most frequently traded asset every day. CoinGecko's data demonstrates that Tether's daily transaction volumes are 23% greater than Bitcoin's (BTC), exceeding $34 billion.
The value of the stablecoin market soared in 2023, adding billions to its total worth in response to Tether and other stablecoins’ rapid surge. Tether's total market value crossed the $90 billion mark for the first time in mid-December 2023, reflecting a 36% surge since January. CoinGecko's data depicts that the overall stablecoin market capitalization has been reaching new all-time highs this year, setting a new record of $131 billion.
Analysts predict the continued growth of stablecoins in the upcoming years. Ryan Rasmussen of Bitwise projects that stablecoins will be handling more transactions in 2024 than the global payment giant Visa.
Published At
12/21/2023 1:58:48 PM
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