Source: Cointelegraph Original: "{title}"
Views from: Maksym Sakharov, Co-founder and Group CEO of WeFi
The current market is experiencing a certain tailwind driven by tariffs imposed by the U.S. government and retaliatory measures from its trade partners. However, market supporters argue that Trump's tariffs are primarily a negotiation strategy, and their impact on businesses and consumers will be manageable.
Market uncertainty drives institutional interest
Factors exacerbating uncertainty include inflationary pressures that may challenge the Federal Reserve's interest rate cut expectations. Additionally, the upcoming debate in Washington over the federal budget is causing unease in the market.
Resolving the debt ceiling issue remains a top priority, as the Treasury is currently relying on "extraordinary measures" to meet the U.S. financial obligations. Analysts expect these measures may run out after the first quarter, but the exact timeline remains unclear.
Despite the government's proposal to eliminate the debt ceiling, this proposal may face resistance from fiscal conservatives in Congress. According to recent reports, despite macroeconomic uncertainties, stablecoins have shown stable growth during this period. Most of the trading volume is driven by Tether's USDt (USDT) and USDC (USDC).
Dollar-pegged stablecoins dominate the market
Stablecoins were initially an experiment—a programmable digital currency that made it easier for users to enter the crypto market and trade different digital assets. A decade later, stablecoins have become a key component of a broader digital financial infrastructure.
The market capitalization of stablecoins has now reached a record $226 billion and continues to expand. Demand from emerging markets is driving this growth. ARK Invest's latest report indicates that dollar-pegged stablecoins dominate the market, accounting for over 98% of the stablecoin supply, while gold and euro-backed stablecoins hold only a small portion of the market.
Moreover, Tether's USDt accounts for over 60% of the total market. ARK's research suggests that the market will continue to expand and may include stablecoins pegged to Asian currencies.
In addition to this, digital assets are undergoing a significant transformation characterized by "stablecoinization" and "dollarization." Asian countries like China and Japan have significantly sold off U.S. Treasury bonds. Saudi Arabia has also ended a 45-year oil dollar agreement, while BRICS nations are increasingly bypassing the SWIFT network to reduce reliance on the dollar.
Bitcoin (BTC) and Ethereum (ETH) have traditionally been the main pathways into the digital asset ecosystem. However, over the past two years, stablecoins have surpassed them, now dominating 35%-50% of on-chain trading volume.
Despite ongoing global regulatory hurdles, the adoption trend of stablecoins in emerging markets continues to rise. For example, in Brazil, 90% of crypto transactions are conducted through stablecoins, primarily for international purchases.
Visa's report shows that Nigeria, India, Indonesia, Turkey, and Brazil are the most active stablecoin markets, with Argentina being the second-largest holder of stablecoins. Additionally, 6 out of every 10 purchases in the country are made using dollar-pegged stablecoins, with USDC and USDT nearly splitting the market.
This trend towards stablecoins is particularly evident in Argentina, primarily due to high inflation and the need to hedge against the depreciation of the Argentine peso. People living in currency-unstable countries are turning to stablecoins like USDT to protect their wealth.
Decentralized banking and its role in high-risk areas
Stablecoins pave the way for a new generation of financial services. For instance, stablecoins provide the foundation for decentralized on-chain banks (or "de-banks"), which use stablecoins as their local currency.
De-banks make digital banking and financial services more accessible to everyone, even those who do not meet strict account opening standards. They also attract those who distrust traditional financial institutions. Users maintain complete control over their funds through non-custodial accounts and enjoy real-time transaction transparency.
The decentralized nature of de-banks replaces intermediaries with smart contracts, directly connecting personal wallets to digital bank accounts. This approach reduces costs and speeds up transaction times. On-chain data transparently preserves the details of every transaction. The result is a financial model that is both efficient and inclusive.
Future outlook
Analysts predict that the market capitalization of stablecoins will exceed $400 billion by 2025. De-banks are bringing new momentum to this growth, leveraging stablecoins to drive economic growth and expand digital payment networks. They open new avenues for cross-border commerce and create new opportunities for financial inclusion.
In the coming years, the combination of stablecoins and next-generation on-chain banks will fundamentally change the way funds flow across borders and how transactions are processed. Backend blockchain integration and stablecoin infrastructure will drive lower fees, faster payments, and broader access to financial services. This trend signifies a transformation from outdated systems and heralds the arrival of a more resilient financial ecosystem.
Views from: Maksym Sakharov, Co-founder and Group CEO of WeFi
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This article is for general informational purposes only and does not constitute legal or investment advice. The views, thoughts, and opinions expressed in the article are solely those of the author and do not necessarily reflect or represent the views of Cointelegraph.
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