Author: Ignas

Compiled by: Tim, PANews

The total supply of stablecoins has reached an all-time high, growing 44% over the past two years.

Which investment strategies will benefit from the widespread adoption of stablecoins?

As background, the Trump administration has set August as the deadline for passing the stablecoin bill.

In this trend, mainstream traditional financial institutions are actively positioning themselves in the stablecoin market. Here are a few examples:

• Bank of America: Open to launching its own stablecoin if regulations allow
• Standard Chartered: Plans to launch a stablecoin pegged to the Hong Kong dollar
• PayPal: Market expansion for its stablecoin PYUSD in 2025
• Stripe: Acquired stablecoin infrastructure platform Bridge for $1.1 billion
• Revolut: Exploring the possibility of issuing a stablecoin
• Visa: Integrating stablecoins into payment systems and global business networks

Previously, an increase in stablecoin supply often led to a rise in cryptocurrency prices, as people would hold these stablecoins temporarily for speculative trading.

Now, the application of stablecoins has gone beyond speculation. For example, SpaceX is using stablecoins to recoup its Starlink sales funds in Argentina and Nigeria, and AI company ScaleAI also uses stablecoins to pay overseas contractors.

The simplest investment strategy is to bet on the track of mainstream institutions potentially issuing new stablecoins.

Ethereum, Base, Tron, and Solana are currently the main public chains for stablecoin issuance.

Notably, although SOL has dominated this bull market, the growth of stablecoins on the Solana chain has been relatively slow. Currently, only the Base chain has successfully entered the stablecoin competition with USDC.

Since the Base chain itself has not issued tokens, Coinbase's stock (NASDAQ: COIN) may become a potential target.

Another strategy is to wait for the IPO of USDC issuer Circle or choose to invest in stocks of Visa and PayPal.

In addition to trading and payments, stablecoins are also used in DeFi to earn yields:

Therefore, if the supply of stablecoins continues to expand, mature DeFi protocols may become the main beneficiaries:

- Aave/Morpho/Euler/Fluid

- Uniswap/Curve

- Maker

- Ethena

Increased stablecoin supply → Boost in total value locked (TVL) on-chain → Growth in protocol fee income → Increase in token valuation (especially for tokens with revenue-sharing mechanisms)

Yield is a key factor influencing the dynamics of the stablecoin market:

For example, PayPal's stablecoin PYUSD is now live on Solana and Ethereum, but its growth has been relatively slow.

Solana once increased stablecoin supply through high annual yield incentives from the Kamino protocol to challenge Ethereum's position, but its on-chain stablecoin supply subsequently stagnated, while Ethereum's supply continues to grow.

Cross-chain platforms and oracle services will benefit from the growth of multi-chain stablecoins, as they bring increased trading volume and fee income:

- Chainlink

- LayerZero/Socket

- Debridge/Across, etc.

However, the most enticing investment opportunities may come from new infrastructure, consumer applications, and yield-generating products that have yet to be launched, as emerging tokens often attract higher market attention.

As cryptocurrency prices warm up, the super narrative of stablecoins will fully explode, and this will be a field where I (as an enthusiastic researcher) will invest more time and effort.

In any case, the widespread adoption of stablecoins is a super positive for the cryptocurrency market:

The demand for block space on public chains like Ethereum, Solana, and Base will surge, making betting on smart contract public chains the most fundamental investment strategy.

What investment strategy do you have in mind?

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