B2BinPay CEO: Four Predictions for the Stablecoin Market in 2025

Author: Arthur Azizov, CEO of B2BinPay, CoinTelegraph; Translated by: Bai Shui, Golden Finance

The stablecoin market will conclude in 2024 and achieve extraordinary development achievements. What should we expect in 2025?

Before we look to the future, we must look at what we have left behind.

The Stablecoin Market in 2024

In 2024, the trend from previous years continues. Major issuers like Tether and Circle have attempted to create stablecoins pegged to currencies other than the US dollar, but adoption has been slow. Euro-backed stablecoins remain a relatively low market cap niche product, and even major players are struggling.

The market has shown a clear preference for Tether's USDT and Circle's USD Coin, with few willing to try new options. This hesitation may stem from the shadow of past collapses, such as the 2022 crash of Terraform Labs and its stablecoin TerraUSD (UST). This collapse shook people's trust in algorithmic and decentralized stablecoins; although they still have supporters, their market share remains small compared to USDT and USDC.

Overall, 2024 is very positive for the crypto world. Bitcoin has soared to $100,000, regulatory frameworks are being developed worldwide, and traditional financial institutions have started to enter the market. The total issuance of stablecoins continues to grow and set new records. In Singapore, the value of stablecoin payments has reached $1 billion, and its usage is expected to continue to grow globally.

Looking ahead, here are four predictions for the stablecoin market in 2025.

Increase in Regulated Stablecoins

In 2025, we may see financial institutions issuing more stablecoins. Tether has already demonstrated the profitability of this model, netting $5.2 billion in the first half of 2024 after depositing reserves into U.S. Treasury bonds.

The strategy is as follows: 1) Launch a regulated stablecoin, 2) Negotiate with well-known exchanges to promote it, 3) Achieve stable returns through investments in fiat reserves. To attract customers, the exchange waived the commission on the stablecoin. This formula is too attractive for traditional financial giants to ignore.

Bank Involvement Custody Services

The EU Crypto Asset Market (MiCA) regulation will be fully implemented in January 2025, which will become an important catalyst. MiCA requires stablecoin issuers to obtain licenses and provides a clear framework for financial institutions to enter the cryptocurrency market.

This clarity of regulation will open the door for banks to provide custody services, which is crucial for integrating cryptocurrencies into the traditional financial system. Custody solutions enable banks to securely store digital assets on behalf of clients, catering to institutional investors and cautious retail users.

Transformation of the European Market

Currently, there are concerns about Tether's USDT stablecoin. It dominates the market but lacks the licenses required for MiCA compliance, and there are rumors that exchanges are preparing to delist USDT for European users. If Tether fails to obtain the licenses, it could potentially lose a significant market share in the region. Such a moment could open the door for regulated alternatives like USDC, which has already received approval in Europe.

The MiCA framework may encourage local participants to enter the market using euro-backed stablecoins, thereby creating more competition and potentially shifting market dynamics away from dollar-centric options.

Stablecoins Pegged to Local Currency

Another trend to watch for in 2025 is the growth of stablecoins pegged to local currencies. In 2024, the Central Bank of the United Arab Emirates approved the launch of the dirham-backed stablecoin AE Coin, which is said to be the first stablecoin regulated by the central bank.

As countries increasingly seek economic digitization, local stablecoins will be integrated into local banking systems.

Outlook on the Stablecoin Sector in 2025

The overall development trajectory of stablecoins is promising. By 2025, the stablecoin market will not only grow but also mature.

Clearer regulations, new entrants, and broader adoption will transform stablecoins from niche financial instruments into mainstream asset classes. Stablecoins will provide faster, cheaper, and more inclusive financial services, integrating with traditional finance.

The large-scale adoption of stablecoins will begin in 2025. Previously, with MiCA landing in Europe and the election of President Donald Trump in the United States, more new players are about to enter the market. The market is also looking forward to new, friendlier regulations regarding cryptocurrencies.

The total market capitalization of USDT and USDC may double or even triple, with the overall market size expected to grow. Localized stablecoins will also play an increasingly significant role, which could challenge the dominance of the US dollar and diversify the market.