Author: Helen Partz, CoinTelegraph; Compiled by: Whitewater, Golden Finance

Crypto stablecoins have achieved great success in 2024, with circulation reaching an all-time high of over $200 billion in December.

Stablecoins – cryptocurrencies designed to mimic the value of a currency, most commonly the U.S. dollar – are an integral part of the crypto ecosystem, accounting for 5% of its market capitalization.

As 2025 approaches, this article summarizes the industry’s predictions and forecasts for the main trends in stablecoins next year.

The next stop is $300 billion: USDT and USDC will remain dominant

Tether’s USDT and Circle’s USD Coin, the two largest stablecoins by market cap, have said ) is likely to remain dominant through 2025.

Guy Young, founder of the decentralized stablecoin protocol Ethena, predicts that USDT will continue to become the largest stablecoin next year, and the total market value of stablecoins will rise to $300 billion.

“I expect we will reach over $300 billion in circulation, with Tether continuing to dominate with its existing moat and the rest of the market being challenged by new fintech and Web2 entrants and their own products ,” Young noted.

The top five stablecoins by market capitalization as of December 24. Source: CoinGecko

Alchemy Pay Chief Marketing Officer Ailona Tsik said that stablecoins such as USDT and USDC “have become important tools for global transactions, and their adoption in emerging markets and decentralized applications is likely to accelerate. ”

“USDT and USDC "Stablecoins backed by fiat currencies such as Bitcoin are likely to maintain their dominance because of their established credibility, liquidity, and broad ecosystem of users and businesses that rely on them," USDC partner Coinbase said in its 2025 announcement. The outlook for 2020 stated that stablecoins are “just getting started,” with some analysts predicting that these tokens could grow to a $3 trillion market within the next five years.

Stablecoin payments: Visa expects surge in demand for stablecoin cards

Cuy Sheffield, head of cryptocurrency at Visa, noted that the adoption of stablecoins can modernize and simplify global payments, but existing stablecoin consumption opportunities are still limited. .

“If 2024 is the year stablecoin demand picks up, 2025 will bring the next key opportunity: the rise of stablecoin-pegged cards,” Sheffield said.

“This demand will only increase through 2025 as wallets look to capitalize on stablecoin adoption and issue stablecoin-pegged cards.”

He said Visa will expand its capabilities , enabling issuers to use stablecoins to settle stablecoin-pegged cards directly with the payments giant.

Simon McLoughlin, CEO of crypto platform Uphold, is also optimistic about increased payments adoption in the coming year.

“2025 will be the year stablecoins enter the mainstream as international payment instruments,” McLoughlin said. He highlighted new stablecoins aimed at cross-border settlements, such as Ripple Labs’ Ripple USD (RLUSD), which began trading on December 17.

Ripple began transferring RLUSD out of exchanges on December 17. Source: Ripple

BitPay Chief Marketing Officer Bill Zielke said that although stablecoins account for only 5% of all transactions, it will account for at least a quarter of crypto payment platform transaction volume by 2024.

“While the average BTC transaction value on BitPay is just over $1,000, USDC transactions average over $5,000,” he said.

“We expect this trend to continue into 2025 as stablecoins further solidify their role in global commerce and business-to-business payments,” Zielke added.

Regulatory disagreements and the need for consistent regimes will persist

While many are optimistic about the growth of stablecoins in 2025, regulation of stablecoins remains inconsistent globally.

Alchemy Pay’s Tsik said: “One of the main challenges we foresee for stablecoins in 2025 is dealing with the changing regulatory environment.”

Ben Reynolds, head of stablecoins at BitGo Regulatory uncertainty and the need for greater transparency will remain significant challenges in 2025 until lawmakers provide clear guidance.

"Crypto Regulation at a Glance" from PwC's 2023 Crypto Regulation Report. Source: PwC

Vishal Gupta, founder of True Markets, noted that the stablecoin legal environment "will continue to suffer from inefficiencies and fragmentation because of inconsistent regulatory regimes."

He mentioned the global surveillance triggered by the EU’s introduction of specific stablecoin rules.Regulatory differences, in particular Market Regulation in Crypto-Assets (MiCA).

“Regulatory divergence may present opportunities in areas where rules are clear and balanced, but also challenges in areas where regulations are overly complex or restrictive,” Gupta said.

As U.S. President-elect Donald Trump prepares to take office in January, companies like BitPay are hoping for greater clarity and consistency in the way stablecoin and crypto markets are regulated.

Stablecoin Trends 2025: L2, Yields, and Interoperability

Many industry executives predict that stablecoins will further develop next year in areas such as Layer 2 (L2), yields, and interoperability.

BitPay’s Zielke said the adoption of L2 stablecoins on networks such as Arbitrum, Optimism and Base will be one of the biggest development areas for coins in 2025.

Tether CEO Paolo Ardoino said that stablecoins "will become the most important currency technology in the next few decades, and blockchain and L2 will be integrated."

BitGo's Reynolds Predicting that next year will see a push for greater interoperability between blockchains to enable stablecoins to be transferred seamlessly across the cryptocurrency space, True Markets’ Gupta noted that this will unlock “new use cases in retail and institutional markets.”

Ethereum, Tron and Avalanche are the three major networks of USDT. Source: Tether

The stablecoin industry is also likely to see more revenue-generating stablecoin solutions in 2025 as L2 and interoperability adoption becomes more widespread.

Azeem Khan, chief operating officer of Ethereum L2 platform Morph, emphasized that stablecoins such as PayPal USD can provide income rewards simply by holding the stablecoin. Companies such as BitGo are also launching yield-generating stablecoins in 2024.

“There will be other yield-generating stablecoins entering the market looking to gain more holders and find ways to add them as payment options,” Khan said.

The Risks of 'Exotic' Stablecoins

True Markets' Gupta says "exotic" stablecoins - those designed to provide higher returns - will increase as demand for stablecoin yields increases .

“The pursuit of higher yields may lead to the creation of ‘exotic’ stablecoins that effectively act as structured financial products, hiding risks that retail users may not fully understand,” he added.

GuptaThe warning said retail investors may be seduced by promises of higher returns without fully grasping the associated risks, which could result in significant losses.

"Industry players must prioritize transparency, detailed risk disclosure and education for retail users. Regulators should set clear standards to protect consumers while maintaining room for innovation."