B2BinPay CEO: Four predictions for the stablecoin market in 2025

Author: Arthur Azizov, CEO of B2BinPay, CoinTelegraph; Compiled by: Baishui, Golden Finance

The stablecoin market will end in 2024 with extraordinary development achievements. 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 continued. Major issuers such as Tether and Circle have tried stablecoins pegged to currencies other than the US dollar, but adoption has been slow. Euro-backed stablecoins remain a niche product with a relatively low market capitalization, and even big-name entrants have struggled.

The market has shown a clear preference for Tether's USDT and Circle's USD Coin, and few are willing to try something new. This hesitation may be caused by the shadow of past crashes, such as the collapse of Terraform Labs and its stablecoin TerraUSD (UST) in 2022. The crash shook trust in algorithmic and decentralized stablecoins, and while 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 surged to $100,000, regulatory frameworks are being developed around the world, and traditional financial institutions have begun to get involved in the market. The total amount of stablecoin issuance continues to grow and continues to set new records. In Singapore, the value of stablecoin payments has reached $1 billion, and its use is expected to continue to grow globally.

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

Regulated Stablecoins Rise

In 2025, we may see more stablecoins issued by financial institutions. Tether has already proven the profitability of this model, netting $5.2 billion in the first half of 2024 after depositing its reserves in U.S. Treasuries.

The strategy went something like this: 1) launch a regulated stablecoin, 2) negotiate with prominent exchanges to promote it, and 3) earn a stable yield by investing in fiat reserves. To attract customers, exchanges eliminated commissions on stablecoins. This formula was too attractive for traditional financial giants to ignore.

Banks step into custody services

The EU Markets in Crypto-Assets (MiCA) regulation, which will be fully implemented in January 2025, will serve as an important catalyst. MiCA requires stablecoin issuers to obtain a license and provides a clear framework for financial institutions to enter the cryptocurrency market.

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

European Market Shift

Currently, there are concerns about Tether’s USDT stablecoin. It has a dominant position in the market, but lacks the license required for MiCA compliance, and there are rumors that exchanges are preparing to delist USDT for European users. If Tether fails to obtain a license, it risks losing a large amount of market share in the region. Such a moment could open the door to regulated alternatives such as USDC, which has already been approved in Europe.

MiCA’s framework may encourage local players to enter the market with euro-backed stablecoins, 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 will reportedly be the first stablecoin regulated by the central bank.

As countries increasingly seek to digitize their economies, local stablecoins will be integrated into local banking systems.

Stablecoin Track Outlook in 2025

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

Clearer regulation, new entrants, and wider adoption will transform stablecoins from niche financial instruments to mainstream asset classes. Stablecoins will provide faster, cheaper, and more inclusive financial services and integrate with traditional finance.

Massive adoption of stablecoins will begin in 2025. Previously, with the arrival of MiCA in Europe and President-elect Donald Trump in the United States, more new players are about to enter the market. The market also expects new, friendlier laws on cryptocurrencies.

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