Stablecoins Could Represent 10% of Global Economy in Next Decade, Predicts Circle CEO
Summary:
Jeremy Allaire, CEO of Circle, predicts that stablecoins could make up 10% of the global economy within the next decade. This optimistic projection relies on increasing adoption of the technology by major payment companies and banking systems, making banking globally accessible and decreasing remittance costs. Allaire believes that the surge in cryptocurrency adoption could lead to billions of users across millions of applications within the next decade, potentially outperforming even some multinational companies.
Jeremy Allaire, CEO of Circle, a stablecoin issuer, has boldly predicted that stablecoins could constitute 10% of the global monetary system within a decade or more. Allaire believes several factors promote the potential for a significant surge in stablecoin usage across the next decade. He observes that most of the world's predominant payment companies are incorporating this technology as its advantages become increasingly evident. With a potential market size in the billions, digital dollars on blockchains could make banking accessible to all, reduce remittance charges, and foster effortless international trade, as per Allaire's statements on June 19 X.
According to Allaire, stablecoins—a progressively accepted form of digital currency—may constitute an ever-growing fraction of the worldwide $100 trillion electronic money market by 2025 end. He poses a scenario where 10% of the global financial system comprises stablecoins and credit intermediation shifts from fractional reserve lending to onchain credit systems, deeming it achievable within the next decade or more.
As of now, the $162 billion stablecoin market represents 0.2% of the $80 trillion money market based on World Population Review data. The combined total of savings, money market, and checking accounts stand at $26.4 trillion, $25 trillion, and $23.6 trillion respectively, with the final $5 trillion accounted for by mints.
For Allaire's 10% prediction to materialize by 2034, the stablecoin market would have to expand at a minimum compound annual growth rate of 47.7%. This estimate, however, doesn't factor in the $80 trillion overlooking the USD Coin's (USDC) growth – a stablecoin issued by Circle pegged to the US dollar. The USDC currently possesses a market cap of $32.8 billion, securing its place as the second-largest stablecoin trailing behind Tether (USDT) according to CoinGecko data. The transaction volumes from USDC, USDT, PayPal USD (PYUSD), and USDP Stablecoin (USDP) since January 2023 lend support to this fact.
But Allaire's optimistic view extends beyond the stablecoin market. In his opinion, crypto usage could escalate to billions of users via millions of apps during the subsequent decade or more. He also conjectures that onchain organizations may outperform some international corporations over the same period, although he refrained from elaborating on the specifics of how this could happen and in which sectors it may occur.
Published At
6/20/2024 3:53:43 AM
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