In today’s fast-paced world, digital assets are no longer a novelty but a growing part of the financial landscape. As we look to 2025, it is clear that the focus will shift from the hype surrounding bitcoin and other cryptocurrencies to real-world use cases. Stablecoins, in particular, will play a crucial role in enabling these use cases, making them the backbone for broader corporate adoption.
The Shift towards Real-World Applications
Initially designed to facilitate trading, lending, and borrowing in digital assets, stablecoins are now being used in various real-world applications. This shift is evident in the growing prominence of the ‘other’ category in the stablecoin ecosystem, as shown in the chart below.
Challenges of Current Systems
Today’s international fiat currency transfers rely on the correspondent banking system, which has remained largely unchanged since the adoption of real-time gross settlement systems in the early 1990s. Membership charges, transaction costs, and volume-based discounts determine fees, while settlement processes are opaque, governed by price-time priority systems that lack transparency for end users.
Why Stablecoins are Transformative
As representations of money on the internet, stablecoins offer unmatched flexibility, speed, and availability – key factors driving their increasing adoption. Some of their real-world applications include:
Cross-Border Payments
Stablecoins enable the transfer of USD assets across borders at speeds comparable to email, in stark contrast to the days-long delays of SWIFT transactions. This advantage is especially significant in emerging markets, where the Bank for International Settlements has reported a decline in correspondent banking relationships.
Supply Chain Dynamics
Stablecoins could revolutionize supply chain efficiency, reducing costs and potentially curbing inflation. Optimizing working capital is a priority for treasury departments worldwide. For instance, Tether has already ventured into trade finance, demonstrating the tangible benefits stablecoins can bring to supply chain operations.
Remittance Flows
Global remittance flows were estimated at $857 billion in 2023. Stablecoins facilitate faster and cheaper transfers, allowing recipients to access funds more quickly. They
