Stablecoins: Five killer tests to gauge their potential

Imagine an economy powered by internet-based money, in which near-instant payments cost a fraction of today’s prices, in which AI agents act autonomously to shop online and invest, and in which complex treasury operations can be ‘vibe coded’ for automation. This is the brave new world powered by stablecoins, once only touted by digital evangelists but now seemingly on the brink of a breakout year. In that context, the urgent task for financial industry leaders is to gauge whether there are significant opportunities and if so, how they can add value in fast-evolving landscape.

The fintech mantra for 2025 is that “stablecoins have found product-market fit,” according to Silicon Valley venture capital firm Andreessen Horowitz.¹ Indeed, by the end of 2024, stablecoins had a market cap of more than $210 billion, amid 57% year-on-year growth and transaction volumes that hit an astonishing $26.1 trillion.² While the vast majority of volumes were related to crypto trading and decentralized finance (DeFi), we estimate that 5-10%—still an impressive $1.3 trillion—were genuine payments transactions in activities such as cross-border remittances, corporate treasury, and retail in geographies including Turkey, Nigeria, and Dubai³. These kinds of use cases represented about 10% of the total 2024 transaction count⁴, driven by lower value payments as transaction costs fell.

Positive sentiment around stablecoins has been matched by IPO and M&A talk. The recent standout example was Ripple’s $4 billion to $5 billion bid for Circle Internet Group (owner of the $55 billion market cap USDC stablecoin5), which was rejected by the stablecoin issuer, along with rumored listing ambitions from the likes of Circle, Kraken, Gemini, Binance, and Bitso.