 ▲ Stablecoin |
The stablecoin market, which surpassed $300 billion last October and had been growing at a breakneck pace, has recently entered a period of stagnation amid a double hit from declining trading volumes and a weakening U.S. dollar. However, prospects suggest that financial infrastructure innovation led by tokenization could reignite its growth.
According to DL News on February 18 (local time), Adam Morgan McCarthy, a senior research analyst at Kaiko, cited a slowdown in crypto asset trading activity and the depreciation of the dollar as key reasons for the market’s stagnation. Stablecoins, a core source of liquidity in crypto trading, have seen demand naturally decline as trading volumes dropped sharply from their October peak. In addition, the dollar has fallen 9% over the past year, significantly reducing the appeal of holding dollar-denominated assets despite yields in the 4% range.
U.S. Treasury Secretary Scott Bessent projected that the stablecoin market could reach $3 trillion by 2030, while Citibank forecast expansion to $4 trillion. However, even after the passage of the GENIUS Act last July, mass adoption has not met expectations. Major financial institutions such as Visa, the New York Stock Exchange, BlackRock, and JPMorgan have launched pilot programs and issued their own stablecoins, yet overall demand remains tied to volatility in crypto asset prices.
Danny Nelson, a research analyst at Bitwise Asset Management, diagnosed that fear is currently the dominant sentiment in the market, with investors seeking exit opportunities rather than focusing on positive developments. Compounding the issue, the Trump administration’s weak-dollar policy aimed at boosting export competitiveness has pushed the dollar index—measuring the greenback against major currencies—down 11% over the past year, making a near-term reversal unlikely.
Nevertheless, experts agree that the long-term growth drivers of the stablecoin market remain intact. Fabian Dori, Chief Investment Officer at Sygnum Bank, emphasized that the next growth phase will be triggered as stablecoins become deeply embedded in financial infrastructure, with tokenization—the conversion of assets such as stocks and bonds into digital tokens on the blockchain—serving as the key catalyst.
BlackRock CEO Larry Fink has also stressed that tokenization will reduce financial costs and enhance transparency. In practice, there is a growing number of cases in which institutions issue and utilize stablecoins for payments, collateral, and settlement purposes. Dori predicted that these developments will link stablecoin demand to substantive financial activities beyond simple trading, while Nelson added that tokenization innovation led by firms like BlackRock will continue to accelerate regardless of prevailing market fear.
Disclaimer: This article is for investment reference only and we are not responsible for any investment losses resulting from its use. The content should be interpreted for informational purposes only.