Stablecoins Hit Record $190 Billion on X-Border Payment Optimism

Stablecoins have achieved a record market value amid optimism about their use in cross-border payments.

The market capitalization for the digital, dollar-pegged currencies has jumped 46% this year to a record $190 billion, Bloomberg News reported Wednesday (Nov. 27), citing DeFiLlama data.

Tether, issuer of USDT — the world’s largest stablecoin — has seen that token’s circulation leap to almost $133 billion, making up 70% of the stablecoin market, the report said. The company now wants to widen the use of USDT by venturing into new industries.

Elsewhere, Stripe announced last month plans to purchase stablecoin startup Bridge for $1.1 billion, one of the largest recorded acquisitions of a digital-asset startup. And other traditional finance companies, such as PayPal, have launched stablecoin projects of their own.

The Bloomberg report argues that these efforts could help prevent another major market crash, such as the $19 billion collapse of TerraUSD in 2022.

While stablecoins have long been used as a way for traders to transmit funds in and out of other tokens, the report says there is rising enthusiasm for the idea of them taking on a stronger role in commerce, especially as a cross-border payment mechanism.

“Blockchain solutions and stablecoins — I don’t like to use the term crypto because this is more about FinTech — they’ve found product-market fit in cross-border payments,” Sheraz Shere, GM payments and commerce at Solana Foundation, told PYMNTS earlier this year. “You get the disintermediation, you get the speed, you get the transparency, you get extremely low cost.”

Stablecoins are a key point in the regulatory discourse around cryptocurrencies, with implications for businesses hoping to streamline transactions and reduce costs when operating in international markets.

The European Union, PYMNTS wrote recently, has been at the forefront of stablecoin regulation thanks to its Markets in Crypto-Assets (MiCA) law, while the British government announced plans last fall to place fiat-backed stablecoins under the oversight of the Bank of England, Financial Conduct Authority and Payment Systems Regulator.

Still, further global regulatory interoperability will be critical in unlocking stablecoins’ full potential.

“The main barrier to widespread stablecoin adoption outside of the crypto ecosystem is the lack of regulatory frameworks,” Tony McLaughlin, of Citi Services’ emerging payments/business development operation, told PYMNTS last week.