The digital asset market is witnessing a surge of new stablecoin launches. Several tech and cryptocurrency companies, including Ripple Labs, Banking Circle, Paxos International, and Hong Kong’s IDA, have recently announced their own stablecoins. Banking Circle debuted its Euro-pegged stablecoin, EURI, last month, complying with the European Union’s (EU) regulatory framework, MiCA. Meanwhile, IDA secured $47 million in seed funding to launch its first fiat-referenced stablecoin, HKDA, regulated in Hong Kong. Ripple Labs, a leading blockchain company, is nearing the launch of its U.S. dollar stablecoin, Ripple USD (RLUSD). Even former President Donald Trump’s upcoming cryptocurrency venture plans to drive the mass adoption of dollar-pegged stablecoins. Additionally, the state of Wyoming is aiming to launch a dollar-backed stablecoin, the Wyoming Stable Token, in the first quarter of 2025.
This wave of launches suggests a growing belief that cryptocurrencies, especially those with less volatile prices, have the potential to revolutionize everyday payments for consumers. However, skepticism remains. Critics argue that many of these new stablecoins lack the unique features needed to attract users away from industry giants like Tether USDT/USD and Circle USDC/USD. A senior cryptocurrency executive told Financial Times, “The reality is a lot of them are just going to burn out.”
The report highlights that stablecoins are currently limited to trading, primarily used for on-ramping and off-ramping services. “Stablecoins are a novelty asset that some people find useful, and some people just buy them because they like the concept of retaining a cash-equivalent value in a digital wallet,” stated Etay Katz, partner at law firm Ashurst in London. He further emphasizes, “No significant bank is going to take risk on a stablecoin issuer on a new name, unregulated name or a start-up.”
According to CoinMarketCap, the total stablecoin market capitalization currently exceeds $170 billion, with USDT holding nearly 70% of the market share. This surge in stablecoin launches may indicate a growing interest in cryptocurrencies as a potential alternative to traditional payment methods. However, only time will tell whether these new entrants can truly compete with established players and gain widespread adoption.
