Stablecoins are rapidly transitioning from niche products to core payment infrastructure, according to asset management giant DWS.
With a combined market capitalization exceeding $250 billion and transaction volumes surpassing Visa (V) and Mastercard (MA), they have become globally traded liquid assets favored by institutions, DWS said in last week’s report.
According to the report, euro stablecoins are setting new benchmarks for efficiency and acceptance.
Stablecoins are cryptocurrencies whose value is pegged to another asset, such as the US dollar or gold. They play an important role in the cryptocurrency markets as they provide payment infrastructure and are also used to transfer money internationally.
The German investment manager sees regulations such as the European Cryptoasset Markets Regulation (MiCA) driving adoption, while growing liquidity and interoperability are making stablecoins an integral part of banking, treasury and B2B payment systems. That integration could unlock new use cases, from bulk payments to automated settlements.
Still, risks remain, DWS said. These include reserve transparency, issuer trust, and regulatory changes.
“Stablecoins exemplify the transformation of the financial system by combining stability with innovation, as well as efficiency with security,” said Alexander Bechtel, Global Head of Digital Strategy, Products and Solutions at DWS; in the report.
Read more: Stablecoin rise could lead to $1 trillion outflow from emerging market banks: Standard Chartered
