Next Generation has projected an impressive growth trajectory for stablecoins, expecting them to emerge as the primary settlement and payment instruments by 2029.
According to Finextra, the company’s president, Suren Hayriyan, emphasized that 2024 marked a pivotal year, showcasing significant advancements in blockchain technology, which is fundamental to enhancing transaction speed, accessibility, and cost-efficiency across the financial sector.
The current year has set a new record for total market capitalization of stablecoins, achieving an all-time high, driven by cutting-edge technology, clearer regulatory frameworks, and increased adoption by institutional players. This surge is underpinned by a robust demand for stablecoins, particularly those pegged to the EURO, spurred by the regulatory push from MiCA. Hayriyan highlighted the disparity between the trading volumes of fiat currency and EURO-coins as a crucial factor for the projected growth, with the market cap for EURO-pegged stablecoins expected to reach $25bn by 2028 and $50bn by 2029.
Looking ahead, Next Generation anticipates that by 2026, issuing stablecoins will become commonplace among large banks and substantial FinTech firms, though less so for smaller players. Hayriyan predicts that by the end of 2028, major financial institutions will have diversified their portfolios to include multiple stablecoins in different currencies, responding to the demand for multi-currency functionalities in global settlements.
The landscape in 2029 might see a saturation point, with intense competition as more entities enter the market. The firm also forecasts a significant increase in investments into stablecoin projects, expecting annual investments to soar from $500m currently to $12bn by 2029. Regulatory developments will also shift the transaction dynamics from predominantly peer-to-peer to primarily institutional uses, with institutional transactions projected to constitute more than 90% of the volume by the end of the decade.
