Experts predict stablecoins may grow 10x in US money supply and FX

Stablecoins currently represent just 1% of the US money supply and foreign exchange (FX) operations, with a market capitalization under $200 billion.  

However, a joint report from Standard Chartered and Zodia Markets suggests that stablecoins could expand significantly, potentially reaching 10% of the US money supply (M2) and FX transactions in the future.  

The report, titled “Stablecoins: The First Killer App,” highlights the evolution of stablecoins beyond their initial use in cryptocurrency trading.  

Originally used as a bridge asset for trading, stablecoins are increasingly being employed for cross-border payments, payroll, trade settlements, and remittances.  

Experts suggest that stablecoins provide solutions to inefficiencies in traditional financial systems, such as high transaction costs, delays, and limited access in underserved areas.  

By offering cheaper and faster transaction methods, they have gained traction for international remittances and business operations.  

The report emphasizes that while the current stablecoin market is relatively small compared to the $21 trillion US M2 and $2.1 trillion in daily FX spot transactions, achieving a 10% share would position stablecoins as a major force in global finance.  

This could reshape the landscape of digital payments and settlements.  

Regulation is seen as crucial to unlocking stablecoins’ potential.  

While previous US administrations made little progress on stablecoin-specific policies, the report suggests that a 2025 Trump-led government may prioritize the regulatory efforts necessary for the growth of stablecoins.  

Regulatory clarity would enable stablecoins to scale and diversify their use cases, further accelerating their adoption.  

Emerging markets are already showing strong adoption, with a YouGov survey finding that 69% of respondents in Brazil, Turkey, Nigeria, India, and Indonesia use stablecoins for currency substitution, and 39% for cross-border payments and transactions.