Global Stablecoins predicted to boom in 2022
2022 could witness a boom in 'Global Stablecoin' market cap along with its utility given the development of DeFi
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Global Stablecoins are growing quickly along with the broader cryptocurrency space, In 2021 the reported exponential growth of Stablecoins was over 500% hitting a market cap of $127 billion compared to a mere $3.7 billion at the end of 2020.
Circle, the issuer of the US Dollar Pegged USDC has realised incredible growth in 2021 and currently has a market value of about $35 billion, compared with $3.7 billion at the end of last year.
Although Stablecoins were predominantly used to trade against popular cryptocurrencies, Jeremy Allaire, the CEO of Circle issuer of USDC announced that the company sees substantial opportunities in the Asian Crypto markets, where they expect to see strong adoption of stablecoins in borrowing and lending markets. He added that the inflation environment and the search for yield would primarily trigger markets’ move to stablecoins.
Commenting on “Circle Yield,” the company’s latest interest-yielding offering, he said:
“While a lot of people want to focus on people hedging by buying Bitcoin directly, we think for stewards of capital within corporations and corporate treasurers and so on, that an allocation into stablecoin yield is actually going to be really, really attractive.”
Circle is currently on a hiring spree to fill up its Singapore headquarters. The company is also setting up an investment arm called Circle Ventures, The venture arm’s first investment will focus on a Japanese yen stablecoin.
On the Singapore regional headquarters,
“We’re hiring people now, we’ll end up hiring quite a few people over time,” and Circle aims “to be one of the first global stablecoins to be licensed in Singapore.”
On the issuance of stablecoins,
“In some cases, we’re going to issue more stablecoins ourselves. In other cases, there are really interesting teams and projects and companies that are building, and we want to be supportive of the growth in stablecoins for payments, for FX, for DeFi, for a lot of different applications.”
As the blockchain space continues to boom, recent data from the International Monetary Fund (IMF) shows that the market capitalisation of stablecoins pegged to the U.S. dollar or Euro – has quadrupled to over $120 billion in 2021, with stablecoin trading volumes overtaking those of all other crypto assets, including bitcoin.
This rapid expansion of USDC and potential European Counterparts like Denmarks eMoney.com which currently supports the Euro (EUR), Swiss Franc (CHF), Swedish Krona (SEK), Norwegian Krone (NOK), and the Danish Krone (DKK) has also attracted the attention of regulators.
Recent reports on global cryptocurrency use also revealed that the emergence of stablecoins and next-gen payments is increasingly catching the eye of banks and other financial service providers who are assessing the potential of blockchain-based assets and Stabletokens to clear and settle accounts.
Last week, the White House, through the top financial regulators in the U.S., issued a report outlining how they wanted to regulate firms like Circle as an insured national depository institution under Fed supervision. While in Europe, this subset of crypto assets issued by companies like eMoney.com has not escaped the eye of regulators either, and their extensive coverage in the soon-to-be-ratified Markets in Crypto-Assets (MiCA) framework is a clear indication that the EU intends to have an important role in implementing safety measures for users who wish to benefit from the fast, cheap, efficient and inclusive means of payment that Global Stablecoins provide.
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