Cryptocurrency trends in the stablecoin space are likely to grow exponentially in the coming years, according to a new report from Next Generation.
The French fintech company estimates that the growth trend will continue until 2029 and the industry will be worth $3.4 trillion.
Stablecoins can become one of the key resources in the field of digital payments, improving transaction efficiency and reducing cross-border costs.
Let’s find out more below.
Next Generation Report: Bright Future Trends in Cryptocurrency Payments with Stablecoins
The crypto stablecoin market is at the beginning of a strong growth trend, according to a report by French fintech company Next Generation.
The group’s experts believe that the sector’s capitalization will exceed $3.4 trillion by 2029.
Considering the industry as a whole is worth $177 billion, this represents a 19x increase in current market value. This prediction may seem overly ambitious, but it does not surprise cryptocurrency industry insiders.
It is true that stablecoins are becoming more and more popular, and their numbers threaten the major providers of electronic payments. The stablecoin outperformed VISA in Q2 2024, as reported in the latest research report by A16Z and later shared by user “Francesco Piccoli”.
In total, the digital payments giant recorded $3.9 trillion in transaction volume last quarter.
The value of stablecoins has more than doubled, reaching $8.5 trillion.
Despite this, Visa hosted almost 54 times as many operations.
I’ve seen the new releases @a16zcrypto “State of Crypto Report 2024”.
A big highlight for me was the data on stablecoins. Stablecoin trading volume has more than doubled from Visa’s $3.9 trillion trading volume in Q2 2024. The amount… pic.twitter.com/ke82rHt7y4
— Francesco Piccoli (@francescpicc) October 18, 2024
Advantages of stablecoins and investing in this field
Stablecoins offer significant advantages over traditional finance, freeing them from the price volatility conditions typical of cryptocurrencies like Bitcoin.
First and foremost, blockchain technology is faster and more economical as it acts as a payment method to be used wisely.
The cryptographic component also helps eliminate liquidity fragmentation issues and provides globally interoperable standards.
Furthermore, stablecoins can be used to eliminate fiduciary intermediaries and facilitate cross-border exchanges between different entities.
Commenting on the recent expansion, Suren Hailiyan, President of Next Generation, said:
“2024 marked a turning point for the fintech sector as a whole and for stablecoins in particular. The main growth drivers for this year and at least the next five years have been determined.”
According to Next Generation, large companies are currently investing more than $500 million annually in the stablecoin space, creating a huge financial opportunity.
In the coming years, investments in the world of cryptocurrencies are expected to increase further, reaching up to 24 times the current figure.
Furthermore, by 2029, institutional stablecoin transactions will account for 90% of the value exchanged virtually.
Suren Hayriyan clearly believes that the market is only now realizing the power of this technology.
“2024 is when the financial sector realizes that the technological center of gravity of development will increasingly shift towards blockchain.”
Expanding the world of fintech: Trends in Web3 and AI
According to a report by Next Generation, in addition to stablecoins, there are two other factors that will have a major impact on our financial lives.
We’re talking about AI and Web3. Within the next two years, these three promising complementary technologies are expected to gain significant adoption.
Fintech companies will increasingly implement connections with the world of decentralized applications and artificial intelligence products.
This situation will push the company towards a new level of digital penetration in the market.
The unstoppable force of new technology connects everything, and stablecoins serve as the economic foundation for accessing these worlds.
It is no coincidence that Stripe, a well-known San Francisco fintech company, recently resumed cryptocurrency payments (after a long hiatus) thanks to its stablecoin USDC.
Okay, Cryptocurrency on @stripe is officially back!
– Accepts stablecoins from over 150 countries
– Buyers pay in USDC (via Ethereum, Solana, Polygon)
– You receive USD as a US company
– Works with checkouts, elements, or payment intents (and soon subscriptions)
Watch the live demo:… https://t.co/zPyQyAMvJd
— Jeff Weinstein (@jeff_weinstein) October 9, 2024
In 2026, cryptocurrency stablecoins will become a fundamental tool not only in the field of remittances, but also for direct financial management and P2P payments between companies.
Reflecting its disruptive potential, its market capitalization is tentatively expected to reach $1.5 trillion that year.
Total holdings are expected to increase to $1.9 trillion in 2027, and are expected to jump to $2.7 trillion in 2028.
Prospects for Euro-pegged Cryptocurrency Stablecoins
One of the most important topics covered in the Next Generation report concerns the impact of the EURO stablecoin on the recent European cryptocurrency regulation MiCA.
The introduction of the legal framework of the “Crypto Asset Market” has revolutionized the European crypto asset world and the companies operating in this field.
With this new legal framework, Europe has made regulations clearer by regulating so-called “cryptocurrency activities.”
The document also includes guidelines for the operation of bullish and bearish issuers of e-money tokens equivalent to stablecoins.
New legal frameworks are encouraging more transparent adoption of technology, with increased adoption in retail stores and institutions.
In parallel with MiCa’s approval, several fintech companies entered the stablecoin world, encouraged by the regulatory launchpad.
For example, French bank Société Générale introduced its own euro-based currency EURCV at the end of 2023, as directed by the new law.
Additionally, Circle had already entered the US market with USDC and wanted to follow the ongoing trend by launching EURC.
Within a few months, the latter’s supply had increased to over 90 million tokens.
New highest value in EURC history💶 ✅
EURC is the largest euro stablecoin by market capitalization and its dominance is growing. Distribution supply exceeds 90 million euros for the first time.
Driven by phenomenal growth, @base – Currently, the chain with the highest volume is… pic.twitter.com/iY3J2RStY0
— Patrick Hansen (@paddi_hansen) October 24, 2024
According to a report by Kaiko Research, MiCA incentives led to a restructuring of the flow of funds for crypto investors.
In fact, the market share of European regulated stablecoins reached an all-time high of 67% last week.
In 2028, the capitalization of this niche market is expected to be $25 billion, and in 2029 it is predicted to be worth $50 billion.
There is a clear trend in Europe where compliant currencies are gaining momentum, to the detriment of “illegitimate” currencies.
Confirming that a similar framework will be introduced for crypto stablecoins in the future, Next Generation’s president added:
“The growth driver will be Eurocoin, due to the significant boost MiCA has given to Europeg stablecoins in 2024. Moreover, the growth gap between fiat and Eurocoin trading volumes will increase over the next five years. Due to the large difference, the demand for euro coins will exceed the supply.”
Source: https://research.kaiko.com/insights/mica-is-reshaping-eur-stablecoin-markets
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