Citi Analysts: Stablecoins Could Bolster Dollar’s Dominance

Cryptocurrencies do not threaten the dollar’s hegemony in the global market; rather, stablecoins make the American currency more accessible. This perspective was outlined by Citi Wealth analysts in their report Market Outlook 2025.

“Initially, crypto assets like Bitcoin were conceived as competitors to fiat currencies. […] However, stablecoins, which account for over 80% of cryptocurrency trading volume, challenge this narrative,” the experts emphasized.

They noted that about 93% of all “stablecoins” are denominated in dollars, and their issuers hold reserves in the American currency, treasury bonds, repo agreements, and money market funds.

“Instead of usurping the dollar, these cryptocurrencies could make dollars more accessible to the world and reinforce the longstanding global leadership of the American currency,” the analysts stated.

In their view, developing a regulatory framework for this asset class in the United States will enhance their appeal to investors. As demand grows, stablecoin issuers purchase more treasury bonds.

According to CoinGecko, at the time of writing, the total capitalization in the niche stands at $206.7 billion. The leader among stablecoins, USDT, accounts for $139.8 billion. Analysts at Coinbase believe this trend is linked to the growth of on-chain lending rates.

According to Citi specialists, the greatest increase in capitalization was observed over the past five years.

In the first quarter of 2024, researchers recorded a peak of activity in the niche. Trading volume reached $5.5 trillion. During the same period, Visa’s payment network volume was approximately $3.9 trillion.

Experts noted that Visa, PayPal, and other traditional payment providers are adapting to this expansion by offering their own stablecoins or settlements in coins from other issuers.

“Stablecoins can make dollars more accessible to the entire world,” they concluded.

Earlier, on December 10, Ripple received permission to launch trading of the stablecoin RLUSD.