B2BinPay CEO: Four Predictions for the Stablecoin Market in 2025

Author: Arthur Azizov, CEO of B2BinPay, CoinTelegraph; Compiler: Bai Shui, Jinse Finance

The stablecoin market will come to an end in 2024, achieving extraordinary developmental accomplishments. What should we expect in 2025?

Before looking to the future, we must examine what we have left behind.

The Stablecoin Market in 2024

In 2024, the trend of previous years continues. Major issuers such as 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 something new. This hesitation may be due to the shadow of past collapses, such as the 2022 crash of Terraform Labs and its stablecoin TerraUSD (UST). This collapse shocked people's trust in algorithmic and decentralized stablecoins, and although they still have supporters, their market share remains small compared to USDT and USDC.

Overall, 2024 is looking very positive for the crypto world. Bitcoin has surged to $100,000, regulatory frameworks are being established globally, 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 increase globally.

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

Regulated Stablecoins Increase

In 2025, we may see financial institutions issue more stablecoins. Tether has already proven 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 investment 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 Intervention Custody Services

The EU Crypto Assets 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 in 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, serving 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 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 Currencies

Another trend to watch 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 digitalization, 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 tools into mainstream asset classes. Stablecoins will offer faster, cheaper, and more inclusive financial services, integrating with traditional finance.

The widespread adoption of stablecoins will begin in 2025. Prior to that, with MiCA landing in Europe and elected President Donald Trump landing in the United States, more new players are about to enter the market. The market is also anticipating new, more friendly 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 dollar and diversify the market.