AMINA Bank: Stablecoins: Key Developments and Future Catalysts 

Stablecoins have evolved far beyond their original role as a bridge between crypto and traditional finance - they now power a multi-billion-dollar industry, shaping global markets and drawing the attention of institutions and regulators alike.

In this edition of the Crypto Market Monitor, we explore the latest stablecoin market developments, the key players driving innovation, and what’s next for this rapidly expanding sector.

The Why

Throughout history, stable forms of value have been essential for enabling trade. Consider the international gold standard, which emerged in the 1870s and built global trust in money until it was abandoned in 1971. Gold provided a benchmark for newer, less stable currencies, helping them gain acceptance. The U.S. dollar, for instance, was once backed by gold - a key factor in its rise as the world’s most widely held reserve currency.

Fast forward to today, and the crypto market is teeming with thousands of digital currencies. At the time of writing, approximately 17,000 active cryptocurrencies are trading across 1,281 exchanges, with hundreds of new tokens launching daily. However, the market is notorious for its volatility. While trading these assets directly against traditional fiat currencies would be ideal, the infrastructure to support seamless crypto-to-fiat conversions is still evolving. Some banks and exchanges are developing solutions, but widespread adoption remains a work in progress.

This is where stablecoins come in. These cryptocurrencies are pegged to the value of traditional fiat currencies, providing a steady reference point in an otherwise turbulent market. For example, USD Coin (USDC), issued by Circle, is tied to the U.S. dollar and generally maintains a $1, assuming a well-functioning market.In times of extreme liquidity shortages or panic trading, minor deviations from the peg can occur. Other widely used stablecoins include Tether’s USDT, Maker’s DAI, and Ethena’s USDe. Currently, more than 260 stablecoins are actively traded.

Figure 1 illustrates the different types of stablecoins based on their reserve backing structure, level of decentralization, and peg mechanism.

Figure 1: Different categorisations of stablecoins

Source: AMINA Bank AG, March 2025.

The current state of the stablecoin market

The stablecoin market continues to expand, with total market capitalization currently hovering around $227 billion. Notably, the combined market cap of the top five stablecoins USDT, USDC, BUSD, DAI, and TUSD, surpassed $200 billion for the first time last month. This recent surge in stablecoin supply appears to be linked to broader macroeconomic and political events. In particular, market data indicates a sharp increase in total stablecoin issuance following the results of the U.S. Presidential election in November 2024.

Figure 2: Crypto stablecoin marketcap witnessed a sudden leap in November 2024 following the results of the US Presidential election.

Source: Glassnode (12 March 2025)

This surge in supply was just the beginning of a larger transformation in the stablecoin market. Over the past month, on-chain stablecoin transaction volumes have increased by 18.5%, signaling growing adoption. With daily average stablecoin transaction volume around $100 billion and the number of unique addresses engaged in stablecoin-related activities hovering around 2 million, the sector is undergoing a series of seismic shifts.

These shifts are being driven by new stablecoin launches, strategic acquisitions, and favorable regulatory developments, all of which are shaping the next phase of stablecoin adoption and utility.

Recent Developments

In the recent past, the first major announcement from the stablecoin sector came in the form of Ripple announcing the listing of their native stablecoin - RLUSD. Ripple’s announcement of RLUSD following approvals by the New York Department of Financial Services has strongly encouraged stablecoin-related activity in the United States. At the time of preparing this article, RLUSD has a circulating supply of close to 135 million, with 94 million of this on Ethereum and close to 41 million on the XRP Ledger. The stablecoin’s cumulative transaction count has exceeded the 400K mark.

Figure 3: RLUSD Circulating Supply

Source: CryptoQuant (12 March 2025)

Parallelly, regulators have also been reshaping the stablecoin market, setting the stage for broader adoption. In Europe, Markets in Crypto Assets ("MiCA") regulations have driven changes in the EUR stablecoin market. The European Union has approved a total of 10 stablecoin issuers under its new stablecoin regulatory framework including the likes of USDC’s Circle and Societe Generale (issuer of the EURCV stablecoin). Tether - the issuer of the world’s largest stablecoin by market cap, USDT - was not on the list. The other approved firms include Banking Circle, Crypto.com, Fiat Republic, Membrane Finance, Quantoz Payments, Schuman Financial, StabIR and Stable Mint.

The latest development in Thailand too is a push for global crypto adoption. Thailand’s Securities and Exchange Commission ("SEC") announced a decision to add Tether’s USDT and Circle’s USDC to its list of approved cryptocurrencies for trading on digital asset exchanges.

Even traditional players have taken a keen interest in stablecoins. Last month, payments giant Stripe completed its $1.1 billion acquisition of the stablecoin platform Bridge that builds APIs for accepting stablecoin payments. Ethena - developer of the USDe stablecoin - raised $100 million to finance iUSDe - a token targeted at traditional financial institutions. Tradfi giants Franklin Templeton and Fidelity Investments' F-Prime Capital were among the backers.

Upcoming Catalysts

The market is also anticipating positive regulatory developments going forward and a resulting boost in activity for the sector. Previously during the White House Crypto Summit on March 7, US Treasury Secretary Scott Bessent said the American government would use stablecoins to ensure the US dollar remains the world’s global reserve currency. As a move towards this vision, the US Senate voted on the Genius Act - a stablecoin bill that would introduce regulations similar to those for traditional financial institutions - which potentially will encourage institutional participation.

While this plan is centered around the dollar rather than directly boosting the crypto stablecoin sector, meaningful regulatory changes are needed to make it a reality. If implemented, these changes could make stablecoins a far more appealing option for US institutions. The market is already gearing up for a new US-based stablecoin issuer, especially after the Bank of America CEO hinted that the bank could launch its own stablecoin - if Congress gives the green light. That makes this bill one to watch, as it could shake up the US stablecoin market and ramp up competition even further.

Beyond the constraints of regulation and the dominance of major players in the US, there’s an exciting development happening on-chain. Aave, the largest lending protocol by market cap, is exploring the launch of sGHO - a savings-focused version of its native stablecoin, GHO. The goal is to boost adoption, building on its current supply of 203 million and a holder base of 3,260.

Conclusion

The stablecoin market is thriving. As demand for digital dollars soars, stablecoins are proving to be one of crypto’s most profitable sectors. Institutions are taking notice and regulators are slowly waking up to their importance. The ability to move value across borders instantly is a game-changer.

But beyond their utility, stablecoins are also a gold mine for issuers. Tether, for example, reported a staggering $13 billion in profits in 2024. And it's not just about profits: the issuer has also committed to putting 15% of its net earnings into Bitcoin - a move that will further crypto’s position in the global financial system. It already holds the sixth-largest BTC wallet, proving that stablecoins are not just a bridge to traditional finance but also a catalyst for crypto adoption.

With capital flowing in and competition heating up, the sector is only getting stronger. Whether through payments or DeFi, stablecoins are quietly reshaping global finance.

Disclaimer - Research
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