The stablecoin market has regained its rise momentum, and it is expected to reach a scale of 1 trillion dollars by 2030.

After experiencing a decline for 18 months, the global stablecoin market is re-entering a rapid rise trajectory. This trend is mainly driven by three key factors: the application of stablecoins as a savings tool, the application as a payment tool, and the yields provided by DeFi that are above the market. It is expected that by the end of 2025, the supply of stablecoins will reach $300 billion, and by 2030 it will climb to $1 trillion.

The scale of stablecoin assets has reached such a large size that it will have a profound impact on the financial markets. Some changes are already foreseeable, such as the transfer of bank deposits from emerging markets to developed markets, and regional banks converting to global systemically important banks (GSIB). However, more transformations are yet to be observed. As foundational innovations, stablecoins and DeFi may fundamentally reshape the credit intermediation model in the future.

Three Major Trends Driving Stablecoin Adoption

Stablecoin as a savings tool

Stablecoins are increasingly becoming an important savings tool, especially in emerging market countries. In economies such as Argentina, Turkey, and Nigeria, the continuous depreciation of local currencies and high inflation pressures have generated strong demand for the US dollar. Stablecoins break through the traditional limitations of US dollar circulation, allowing individuals and businesses to easily access dollar-backed liquidity via the internet.

Although it is currently difficult to accurately estimate the savings scale based on stablecoins in emerging markets, this trend is rapidly developing. Some companies that provide stablecoin settlement cards have emerged, allowing consumers to spend their savings in stablecoins at local merchants through the Visa and Mastercard networks.

Taking Argentina as an example, the fintech application Lemoncash reported that its $125 million "deposits" account for 30% of the centralized crypto application market share in Argentina. This means that the asset management scale of Argentina's crypto applications is approximately $417 million, but the actual stablecoin AUM could be at least 2-3 times this figure. Although relatively small in scale, $416 million already accounts for 1.1% of Argentina's M1 money supply and is still growing. This phenomenon is spreading across several emerging market countries.

(# Stablecoin as a payment tool

Stablecoins are also becoming a viable alternative payment method, especially in the field of cross-border payments, competing with SWIFT. Compared to traditional cross-border transactions, stablecoins have significant advantages. Over time, stablecoins may evolve into a meta-platform connecting various payment systems.

According to the Artemis report, B2B payments alone contribute to a monthly payment volume of 3 billion dollars, annualizing to 36 billion dollars. Galaxy believes that considering all non-crypto market participants, this figure could annualize to over 100 billion dollars. More notably, between February 2024 and February 2025, B2B payment volumes rose fourfold year-on-year, demonstrating strong growth momentum.

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(# DeFi offers yields higher than the market.

In the past five years, DeFi has consistently provided structurally higher US dollar-denominated yields, allowing users to obtain returns of 5% to 10% with relatively low risk. This has already, and will continue to, drive the popularity of stablecoins.

A notable feature of the DeFi ecosystem is that the "risk-free" interest rates of underlying protocols like Aave and Maker reflect the broader state of the cryptocurrency capital markets. As long as new ideas continue to emerge in the blockchain space, the foundational yields of DeFi are expected to remain higher than the yields of U.S. Treasury bonds.

Since the "native language" of DeFi is stablecoin rather than the US dollar, any arbitrage behavior that attempts to exploit the interest rate difference between DeFi and traditional markets will drive the expansion of stablecoin supply. Data shows that when the interest rate spread between Aave and US Treasuries is positive, the total locked value ) TVL ( will rise; when the spread is negative, TVL will decrease.

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( The impact of stablecoin on the traditional banking system

The widespread adoption of stablecoins may lead to the disintermediation of traditional banks, as it allows users to directly access dollar-denominated savings accounts and cross-border payment services without relying on traditional banking infrastructure. This will reduce the deposit base that banks use to stimulate credit creation and generate net interest margins.

)# Substitution effect of bank deposits

Currently, every 1 dollar of stablecoin is usually backed by 0.80 dollars of government bonds and 0.20 dollars of bank deposits. Taking Circle as an example, its 61 billion USDC is supported by 8 billion in cash and 53 billion in ultra-short-term U.S. government bonds or repurchase agreements.

When users transfer funds from traditional bank accounts to stablecoins like USDC or USDT, they are essentially moving deposits from regional/commercial banks to U.S. Treasury bonds and major financial institutions. The implications of this trend are profound: while users maintain the purchasing power of the dollar by holding stablecoins, the actual bank deposits and Treasury bonds backing these tokens will become more concentrated, rather than dispersed throughout the traditional banking system.

Forced Credit Tightening

A key social function of bank deposits is to provide credit to the economy. The fractional reserve system allows banks to lend out multiples of their deposit base. As deposits shift to stablecoins, the deposit base available for lending at regional banks may decrease, potentially leading to credit contraction.

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)# Excessive allocation of credit by the US government

For the U.S. government, the rise of stablecoins could be a boon. Currently, stablecoin issuers have become the twelfth largest buyers of U.S. Treasury bonds, and their holdings are growing at a rate consistent with the assets managed by stablecoins. In the near future, stablecoins may become one of the top five buyers of U.S. Treasury bonds.

When the scale of stablecoins reaches a sufficiently large amount of ###, such as 1 trillion USD (, it may have a significant impact on the yield curve, as short-term U.S. Treasury bonds will have a large buyer that is insensitive to price. This could distort the interest rate curve that U.S. government financing relies on.

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(# New asset management channel

The development of stablecoins has created a brand new asset management channel. This trend is somewhat similar to the transformation from bank loans to non-bank financial institutions ) NBFI ( after the Basel III Accord.

As stablecoins draw funds away from the banking system, especially from emerging market banks and regional banks in developed markets, stablecoin issuers may gradually become important lending institutions. If stablecoin issuers decide to outsource credit investments to professional companies, they will become LPs of large funds and open up new asset allocation channels.

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(# Effective Frontier of On-Chain Yield

In addition to basic bank deposits, stablecoins themselves can also be lent on-chain. Consumers will need yield products priced in stablecoins, such as Aave-USDC, Morpho-USDC, Ethena USDe, etc. These "vaults" will provide users with on-chain yield opportunities, thus opening up another asset management channel.

In the future, new vaults that track different on-chain and off-chain investment strategies may emerge, competing for stablecoin holdings in various applications. This will create an "effective frontier of on-chain yield," where some vaults may specifically provide credit to regions such as Argentina and Turkey, where banks are at risk of losing this capability.

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) Conclusion

The integration of stablecoins, DeFi, and traditional finance is reshaping the global credit intermediation landscape, accelerating the shift from bank to non-bank lending since 2008. By 2030, the asset management scale of stablecoins is expected to approach $1 trillion, driven by their use as a savings tool in emerging markets, efficient cross-border payment channels, and DeFi yields that exceed market rates.

This transformation brings both opportunities and challenges: stablecoin issuers will become important participants in the government debt market and may become new credit intermediaries; meanwhile, regional banks ###, especially in emerging markets (, face the risk of credit tightening. The ultimate result is a new asset management and banking model, in which stablecoins will serve as a bridge to the forefront of efficient digital dollar investments. This will have profound implications for monetary policy, financial stability, and the future architecture of global finance.

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