Cryptocurrencies have been steadily making their way onto the global economic landscape, and stablecoins in particular could play a major role in the coming years. According to Jeremy Allaire, CEO of stablecoin issuer Circle, these stablecoins could account for 10% of "global economic money" over the next decade or more.
Allaire highlighted several factors that could trigger an exponential expansion in the adoption of stablecoins over the "next 10 years". "Most of the world's largest payment companies are actively using this technology and are exploring how to expand their use as the benefits of public blockchain and stablecoins become clear to everyone," Allaire explained in a post on X dated 19 June.
Allaire described the size of the addressable market in terms of "billions" and claimed that deploying digital dollars on blockchains could deliver on the promise of banking the unbanked, reducing the costs of transferring funds and enabling frictionless cross-border trade. He noted that stablecoins are becoming an increasingly accepted form of digital currency and will account for an "increasingly large portion" of the $100 trillion global e-money market by the end of 2025.
"What does the world look like when 10% of the world's economic money is made up of stablecoins and credit intermediation shifts from fractional reserve lending to blockchain credit markets?" asked Allaire. "This is achievable over the next 10+ years," he said.
Currently, the stablecoin market, valued at $162 billion, represents 0.2% of the $80 trillion money market size, according to data from World Population Review. Savings accounts, money market accounts and checking accounts for around $26.4 trillion, $25 trillion and $23.6 trillion respectively, while the remaining $5 trillion comes from minted currencies.
For Allaire's prediction of 10% to be realised by 2034, the stablecoin market would need to grow at a compound annual growth rate of at least 47.7%, although the estimate does not take into account the growth of the $80 trillion silver market.
USD Coin (the US dollar stablecoin issued by Allaire's Circle) currently has a market capitalisation of $32.8 billion, making it the second largest stablecoin behind Tether, according to data from CoinGecko.
In his view, cryptocurrency adoption could grow to reach "billions of users" across "millions of applications" over the next decade or more, with much more commerce and finance executed through smart contracts on the public infrastructure of blockchains.
He even believes that some blockchain organisations could outperform some multinationals over this period, although he did not specify how or in which sectors.
