Non-US dollar stablecoins can encourage adoption: report
Stablecoins are gaining traction, but they still account for only a small fraction of global online business transactions — and there are very few stablecoins pegged to currencies other than the U.S. dollar, according to a report published Nov. 27.
According to the report, created by strategy consultant Quinlan & Associates and blockchain developer IDA, cryptocurrencies, including stablecoins, “account for only 0.2% of global e-commerce transaction value.
“Combined with blockchain-enabled convenience features such as programmability, Stablecoins can provide cost-effectiveness, improved transparency, 24/7 availability and speed of processing that traditional financial systems simply cannot match,” IDA co-founder and CEO Lawrence Chu said in a statement.
Despite this potential, stablecoin “use remains largely confined to the Web3 ecosystem,” the report said, citing regulatory uncertainty and limited non-USD stablecoin options as significant obstacles.
Source: Quinlan and Associates, IDA
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“This reluctance is largely driven by regulatory skepticism, with 81% of merchants citing digital assets such as stablecoins as a major barrier to accepting digital assets as a primary payment option,” Benjamin Quinlan, CEO of Quinlan & Associates, said in a statement.
Additionally, “Non-USD statcoins are in high demand as 83 percent of countries around the world do not use the dollar as an official or secondary currency and ~40 percent of global payments are made in non-USD currencies,” the report said. .
Stablecoins represent $200 billion in total market capitalization, almost all of which involve stablecoins pegged to the dollar, according to data from CoinMarketCap.
Tether's USDt (USDT) and USD Coin (USDC) are the most popular cryptocurrencies, with market capitalizations of around $130 billion and $40 billion, respectively, according to the data.
The IDA “plans to launch a stablecoin against the Hong Kong dollar to support payments between Hong Kong and international markets,” Quinlan and the IDA said.
Source: CoinMarketCap
Stablecoins appear to be increasing demand for short-term US government bonds known as Treasury Bills, according to the US Treasury Department.
“[B]According to Treasury meeting minutes released on October 29, most stablecoin collateral consists of Treasury bills or Treasury-backed repurchase agreement transactions. .
In the year On November 20, former US Senator Pat Toomey told Cointelegraph that lawmakers could advance stablecoin regulations as early as 2025.
Tomei believes there are many unanswered questions regarding Statcoin issuers that need to be addressed first, including reserve requirements, bank deposit insurance and regulatory jurisdiction.
A number of key crypto legislation will be considered in the upcoming session of Congress, including Senator Bill Hagerty's Transparency for Payment Stablecoins Act.
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