The market capitalisation of stablecoins is expected to rise from the current $115 billion to $1 trillion by 2025, and existing regulatory uncertainty will not derail it. Such a forecast, in an interview Business Insider, was given by an early crypto enthusiast and the head of the decentralised domain registrar Unstoppable Domains, Matthew Gould.
He did not rule out that momentum could exceed his expectations due to the popularity of DeFi-applications.
“Rates could be higher still. The larger the audience for stablecoins, the more users in the decentralised finance sector,” the expert noted.
In the interview, Gould also touched on the risks inherent to stablecoins—the loss of the peg to the underlying asset and volatility.
“With such growth these questions are inevitable. You should not call yourself a $1 coin unless you have $1 in your bank account,” the expert emphasised.
Gould is optimistic about the future. He believes that removing regulatory uncertainty and rising competition will gradually neutralise these risks. As an example he cited USD Coin (USDC), the issuer of which strives to fully comply with the state-imposed requirements.
Regarding Bitcoin, in the medium term the expert was not as optimistic. Gould suggested that the first cryptocurrency would take at least a year to return to its all-time high.
“I see a corridor to the end of the year. In my experience after a 50% crash it takes a year or two of consolidation,” the CEO of Unstoppable Domains emphasised.
In July, US Treasury Secretary Janet Yellen called for the swift creation of a regulatory framework for stablecoins.
The chair of the US Federal Reserve (Fed) Jerome Powell expressed skepticism about the need for stablecoins. He compared stablecoins with money-market funds and savings banks.
In June, Boston Fed President Eric Rosengren stated that stablecoins threaten the financial system. The Fed’s vice chair Randall Quarles urged not to fear stablecoins.
Earlier, a study by Yale economist Gary Gorton and Federal Reserve lawyer Jeffrey Zhang predicted a return of the United States to the era of “wildcat banking” in the 19th century in the absence of proper regulation of stablecoins.
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