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

The stablecoin market will end in 2024 and has achieved extraordinary development achievements. What should we expect in 2025?

Before we look to the future, we must look at what we have left behind.

The stablecoin market in 2024

In 2024, the trend of previous years will continue. Major issuers such as Tether and Circle have experimented with stablecoins pegged to currencies other than the U.S. 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 people are willing to try new things. This hesitation may be due to the shadow of past crashes, such as the 2022 debacle of Terraform Labs and its stablecoin TerraUSD (UST). The collapse shook trust in algorithms 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 soared to $100,000, regulatory frameworks are being developed globally, and traditional financial institutions have begun to enter the market. The total amount of stablecoin issuance continues to grow and continues to set new records. The value of stablecoin payments has reached $1 billion in Singapore, 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 financial institutions issue more stablecoins. Tether has proven the profitability of this model, netting $5.2 billion in the first half of 2024 after depositing its reserves into U.S. Treasuries.

The strategy is this: 1) launch a regulated stablecoin, 2) negotiate with reputable exchanges to promote it, 3) earn stable returns by investing in fiat reserves. In an effort to attract customers, the exchange eliminated commissions on stablecoins. The formula was too attractive for traditional financial giants to ignore.

Banks intervene in custody services

The European Union’s crypto-asset market (MiCA) regulation will be fully implemented in January 2025, which will be 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 for integrating cryptocurrencies into the traditional financial system. Custody solutions enable banks toSecurely store digital assets on behalf of clients, serving both institutional investors and discreet retail users.

European Market Shift

Currently, there are concerns about Tether’s USDT stablecoin. It dominates 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 is unable to obtain a license, it risks losing significant market share in the region. Moments like this could open the door to regulated alternatives like USDC, which has already received European approval.

MiCA’s framework may encourage local players to enter the market using euro-backed stablecoins, thereby creating more competition and potentially shifting market dynamics away from USD-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 it said will 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.

Outlook for the Stablecoin Track in 2025

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

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

Mass adoption of stablecoins will begin in 2025. This follows the arrival of MiCA in Europe and the arrival of President-elect Donald Trump in the United States, with more new players on the horizon. The market is also expecting new, friendlier laws regarding cryptocurrencies.

The combined market capitalization 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 could challenge the dominance of the U.S. dollar and diversify the market.