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As 2025 begins to unfold, some experts and network providers are beginning to think the year could see a breakthrough for stablecoins, the digital currency generated by a blockchain but with a value tied to a national currency, such as the dollar. That link allows users to deploy digital dollars, for example, without fearing the wild swings in value that Bitcoin and other cryptocurrencies are subject to.
The roster of stablecoins has grown to at least 195 since the first such token, BitUSD, emerged in 2014. That’s the number of coins ranked by Coinmarketcap, an online reference on digital currencies. More are coming soon, experts say. “I’ve noticed a uptick in interest in the past year,” says Aaron McPherson, principal at AFM Consulting. And major payments platforms are jumping into the game. The most recent example is the PYUSD token launched by PayPal Holdings Inc.
Even traditional financial institutions are starting to dip into the market. “There’s work being done by major banks on deposit tokens,” says McPherson. “If you have money on deposit, you create a token and put it on the blockchain. It can be traded, mediated on the blockchain.”
Crypto platforms like Circle Internet Group, meanwhile, are putting out digital guides to buying, managing, and selling stablecoins. Circle’s entry, USDC, ranks second among stablecoins, with a market capitalization of $45.8 billion, according to Coinmarketcap. The top coin, Tether, is way ahead at $137 billion.
And Ripple, an early exponent of stablecoins, is expected to issue Wednesday a new coin, ripple USD, after months of legal wrangling with the Securities and Exchange Commission over a prior coin, XRP. “Ripple has been reinvigorated, they’re well-positioned,” noted McPherson.
Looming in the background, meanwhile, is a Trump administration that many view as more open to cryptocurrency than the outgoing one. “There’s an expectation that a new administration coming in will be much more friendly to crypto,” says McPherson. “We can expect a more permissive regulatory environment.”
But there may be a few clouds on the horizon for stablecoins. Competition from established players like Circle and the increasing capital demands the market is likely to generate will put pressure on lesser coins, observers say. “We’ve got a profusion of stablecoins now, which means a shakeout at some point,” warns McPherson.
And in the United States, at least, where the national government has looked at the potential for a form of federally issued stablecoin called a US digital dollar (USDC), not all officials are enthusiastic about private-sector stablecoins. The coins “could pose significant risks to financial stability, monetary policy, and the U.S. payments system,” a Fed official noted at a conference in 2023.
