Stablecoins have emerged as a powerful force in the global financial landscape, reaching new heights in circulation and usage. According to a recent report by Bernstein analysts, the total supply of stablecoins has rebounded to an all-time high of $170 billion, with monthly settlement volumes tripling over the last 12 months to $1.4 trillion in July 2024. This remarkable growth underlines the increasing importance of stablecoins within the crypto ecosystem and beyond.
The analysts emphasized that stablecoins are becoming “systemically important,” now ranking as the 18th largest holder of U.S. Treasury securities, alongside major sovereign holders. They highlighted stablecoins’ role in providing USD savings access to international users and serving as the primary base currency for crypto trading. Tether USDT/USD remains the dominant player with $120 billion in circulation, followed by Circle’s USDC/USD at $35 billion. The analysts attributed Tether’s lead to its integration with global offshore exchanges and cross-border payments usage in non-US markets.
Bernstein rated Robinhood HOOD an Outperform with a price target of $30, anticipating that the platform will continue integrating stablecoins for crypto trading and cross-border transfers. Robinhood’s recent acquisition of the international crypto exchange Bitstamp further underscores this commitment.
Interestingly, stablecoin adoption appears to be decoupling from overall crypto market volatility. Monthly active wallets holding stablecoins have consistently risen to 22 million, despite fluctuations in trading volumes. This indicates growing usage beyond just crypto trading.
The report also highlighted the emergence of new players in the stablecoin space, including PayPal’s PYUSD/USD, which has reached nearly $1 billion in circulation since its launch. Ethereum ETH/USD continues to dominate stablecoin transaction volume, accounting for about 45% of total transfers.
Perhaps most notably, the analysts found that younger demographics, particularly in emerging markets, are embracing stablecoins as a store of value. “20% of 18-24-year-olds (in emerging markets) hold 25-50% of their portfolio in stablecoins,” the report stated, indicating a growing trend of using stablecoins as an alternative to local currencies. This trend underscores the potential for stablecoins to play a significant role in bridging the gap between traditional finance and the decentralized world.
