The Rise of Stable Coins
The REAL cryptocurrencies
Cryptocurrency is now TradFi, as stablecoins and other crypto vehicles are surfacing more in traditional banks and investment vehicles like ETFs. The total crypto market capitalization recently hit $3.5 trillion, up 33% from the previous year. This growth has been driven by clearer regulations, institutional involvement, and real-world use cases. In the U.S., stablecoins, where the coin is pegged to $1, things are moving quickly. With Congress advancing new laws and major companies embracing crypto payments. From Circle’s upcoming IPO to BlackRock’s involvement, it’s clear that crypto is no longer just for niche communities. Let’s dive into how these developments point toward crypto becoming an integral part of mainstream finance.
Stablecoins are at the center of the latest adoption to mainstream in the U.S., with lawmakers making significant strides in advancing regulations. This month, the U.S. Senate took an important step by moving forward with the GENIUS Act, the first comprehensive federal framework for stablecoins. This bill, which passed in a strong bipartisan vote, aims to ensure that stablecoins have proper safeguards without stifling innovation. Stablecoins are growing rapidly, with a combined market value of around $232 billion. This rapid rise is driving lawmakers to act, and the GENIUS Act is one of the most promising developments yet.
The framework addresses everything from reserves and audits to oversight of issuers. It’s clear that Congress is looking to provide regulatory clarity, helping businesses and users feel more confident in the stability and transparency of these digital dollars. The growth of stablecoins is a significant signal that they are not just a passing trend but a major part of the future of finance.
Circle’s IPO and BlackRock’s Confidence
One of the most exciting developments in the crypto space is Circle’s upcoming IPO. Just in case you don’t know, Circle is the company behind the USDC, and its move toward going public signals that crypto is entering the mainstream financial world. BlackRock, the world’s largest asset manager, is backing Circle’s IPO with a significant stake. BlackRock was an early investor in Circle, and its deeper involvement in the IPO shows just how much institutional confidence has grown in the crypto space. Coinbase is also a minority stake owner.
For Circle, this IPO would be the first of its kind for a stablecoin first company. USDC is the second-largest stablecoin globally, and a public listing would be a huge step in bringing crypto to the mainstream. BlackRock saying that they will buy 10% is a major validation but also a hint that they are going to be heavily involved as well. If Circle’s IPO goes as planned, we could see a wave of other crypto companies come next. This is in addition to other ETFs coming as well. Also, it’s a wonder that Circle wasn’t acquired by banks earlier, they are literally running the same business model, holding money and making interest off it.
PayPal and the Rise of Crypto Payments
It’s not just crypto-native companies that are getting in on the action – mainstream fintech companies are also integrating digital assets into their offerings. A prime example is PayPal, which in 2023 launched its own stablecoin, PayPal USD (PYUSD). Fully backed by dollar deposits and U.S. treasuries, PYUSD is designed for easy integration into PayPal’s massive ecosystem, allowing users to send, receive, and store digital dollars. This move makes PayPal the first major financial tech company to issue a stablecoin, signaling that crypto is ready for everyday use.
PayPal’s CEO, Dan Schulman, emphasized that the shift toward digital currencies requires a stable instrument that is both native to the digital world and connected to traditional currencies. The launch of PYUSD is a clear example of how stablecoins can be used for more than just trading, they’re becoming a viable way to make payments and facilitate digital commerce. We’ll likely see Stripe starting to get involved next.
The rest of the world?
The U.S. may be leading in many respects, but other regions are also pushing crypto to the mainstream. Europe, for instance, has made significant strides with its MiCA regulation, which establishes a uniform legal framework for crypto across the EU. This framework gives clarity to stablecoins, digital assets, and crypto businesses, making it easier for European firms to operate in a regulated environment. Several European banks, including ING, are already experimenting with stablecoin projects, signaling a growing interest in digital currencies.
In Asia, Hong Kong has become a crypto-friendly hub by launching a new licensing regime that allows licensed exchanges to offer retail crypto trading services. This move has attracted several global crypto firms to set up operations there. Japan and Singapore are also making strides by loosening regulations on crypto listings and creating a more favorable environment for crypto businesses. Meanwhile, in Latin America, countries like Argentina have seen a rise in stablecoin adoption as a way to hedge against inflation, highlighting the practical uses of crypto in economies facing financial instability.
Even though we are on the topic of stablecoins, it’s also worth pointing out stocks are now venturing into crypto (so we went from defi to tradfi and now tradfi to defi...)
Kraken will soon offer stocks (AAPL, TSLA, NVDA, and SPY), and Solana will soon have tradable stocks via Superstate. Robinhood also will allow EU countries to trade tokenized equities from the US as well. It seems that this is also the next frontier.
In summary: Stablecoins are going to be big, and it’s happening quickly without much fanfare. Why is no one making a big deal out of this!? In the U.S., regulatory clarity is increasing, with lawmakers pushing forward stablecoin regulations and creating a framework for future innovation. Institutional players like BlackRock are showing confidence in the crypto market, while fintech giants like PayPal are integrating stablecoins into their services. The approval of crypto ETFs on Wall Street has made it easier for traditional investors to get involved, and global trends in Europe, Asia, and Latin America are further cementing crypto’s place in the financial landscape.
I predict that within the next year, we’ll see stablecoins as a mainstream method to pay and transact with banks and other vendors. It’s going to be wild, I think the Circle (CRCL) IPO will be very successful too.
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