Deutsche Bank Analysts: US Regulation ‘Could Cement Stablecoin Legitimacy’

Stablecoins are entering the mainstream, two Deutsche Bank analysts wrote in a report provided to PYMNTS.

Despite the U.S. Senate blocking the GENIUS Act last week, progress toward landmark legislation is still expected this year, Deutsche Bank Managing Director — Macro Strategist, Thematic Research Marion Laboure and Analyst, Macro and Thematic Research Camilla Siazon wrote in the report.

In the meantime, the market cap of stablecoins leapt from $20 billion in 2020 to $246 billion, the transfer volume of stablecoins reached $28 trillion in 2024, and 83% of stablecoins are pegged to the U.S. dollar, according to the report.

“More than just financial tools, stablecoins are fast becoming strategic assets,” the report said.

The report added that stablecoins now anchor global crypto liquidity, have use cases that are expanding beyond crypto, process a higher dollar value in transactions than Visa and Mastercard, and provide “a safe haven in volatile markets.”

In addition, stablecoins reinforce U.S. dollar dominance, play a major role in U.S. short-term debt markets, and are increasingly being used by corporations for payments and remittances, per the report.

U.S. regulation “could cement stablecoin legitimacy in 2025” and “bring clarity, enabling mainstream use cases and deeper financial integration,” the report said.

It was reported Monday that Citi predicted that new regulatory efforts promoting the integration of dollar-pegged coins into the mainstream economy might soon make the stablecoin market surpass the larger cryptocurrency ecosystem.

Already moving into the payments/remittances space, the digital asset will likely replace some overseas and domestic U.S. currency holdings, CoinDesk reported, citing a recent report from Citi Institute’s Future Finance think tank.

The report noted that the current stablecoin market is around $240 billion and that Citi’s baseline projection shows the market jumping to $1.6 trillion by 2030, assuming regulatory support and institutional integration continue apace.

It was reported Thursday (May 8) that a bill to promote stablecoins was blocked in the U.S. Senate over political disagreements and controversy surrounding President Donald Trump’s crypto ventures.

The primary point of contention was a Democratic demand for a provision that would prohibit Trump and other senior officials from profiting from crypto ventures while in office.

Still, many Democrats view stablecoin regulation as essential for consumer protection.