Polygon Executive Predicts Emergence of 100,000 Stablecoins by 2029

Polygon executive predicts 100,000 stablecoins by 2029, challenging banks.

The global rise of stablecoins will compel traditional banks to fight to retain capital and rethink their business models, according to Aishwary Gupta, head of payments and RWA at Polygon, in an interview with The Fintech Times. He stated that the market has entered the initial phase of a stablecoin “supercycle.” This trend sees every major organization striving to issue its own fiat-pegged coin.

Gupta forecasts that at least 100,000 such assets will emerge in the market over the next five years.

This explosive growth will pose a significant challenge to traditional banking models. For decades, credit institutions have relied on low-interest deposits as a cheap source of capital.

Now, stablecoins offer investors returns unattainable in the traditional system.

“The capital outflow undermines the very foundation of bank lending. Deposits are the fuel for loans; without them, banks will face rising capital costs and an inability to perform their core function,” warned the Polygon executive.

The Solution

Gupta believes that in response to the capital outflow, banks will start launching deposit tokens—digital equivalents of client funds that keep money within the banking system while providing all the advantages of blockchain.

Using JPMorgan as an example, the expert described a model where a wealthy client can use JPMD coin for transactions on platforms like Coinbase without removing real money from the bank’s control.

According to him, this approach will maintain balance while simultaneously satisfying the growing demand from clients for digital asset mobility.

BNY Mellon is working on its own deposit token. The bank’s head of treasury services, Karl Slabicki, believes such tools will allow financial organizations to move away from the constraints of outdated systems and simplify the movement of deposits and payments within their ecosystems.

In May, HSBC introduced a tokenized deposit service for corporate clients in Hong Kong and Singapore. In September, the bank expanded the product to the UK and Luxembourg markets and added support for settlements in local currencies.

Back in November, JPMorgan and DBS announced a blockchain system for interbank transfers. The project’s goal is to establish a new industry standard for institutional digital payments.