Expected Growth of Stablecoins and Financial Integration in 2025

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@Roy, I hope you can take this on.

Working Title: "The Bright Future of Stablecoins in 2025: Accelerated Growth and Popularization"

This covers the growth and popularization of stablecoins in 2025. I believe you can utilize your expertise in economic financial regulations and policies. I believe you will do well.

Let's begin the research.

Looking back at the stablecoin market in 2024, major issuers experimented with stablecoins linked to currencies other than the US dollar, but adoption was minimal. Euro-linked stablecoins still have a low market share and slow adoption. The market favored Tether's USDT and Circle's USD Coin, with few people willing to try something new. This is likely due to shaken trust after events like the collapse of TerraUSD (UST) by Terraform Labs in 2022.

Nevertheless, 2024 was a very positive year for the cryptocurrency world. Bitcoin's price soared to $100,000, and global regulatory frameworks are steadily being developed. In Singapore, stablecoin payments reached $1 billion and are expected to continue increasing worldwide.

Here are four main predictions for the stablecoin market in 2025:

First, the increase in regulated stablecoins. Tether's business model has provided an attractive case for financial institutions, making it likely that more traditional financial institutions will issue regulated stablecoins.

Second, the entry of banks into custody services. With the full implementation of the EU's MiCA regulations in January 2025, banks offering digital asset custody services will accelerate the integration of cryptocurrencies and traditional financial systems.

Third, changes in the European market. While Tether's USDT currently dominates the market, failure to obtain a MiCA license could lead to a loss of market share in Europe. This will provide an opportunity for regulated alternatives like Circle's USDC to emerge in the market.

Lastly, the expansion of locally linked stablecoins. As seen with the Central Bank of the UAE's launch of the AED-linked stablecoin AE Coin in 2024, countries are expected to increasingly integrate local stablecoins into their banking systems as they push for the digitalization of their economies.

By 2025, the stablecoin market is expected not only to grow but mature. Clear regulations, new market entries, and broader adoption will transform stablecoins into mainstream asset classes. Stablecoins will provide faster, cheaper, and more inclusive financial services while integrating with traditional finance. The market share of USDT and USDC may double or even triple, and localized stablecoins are likely to diversify the market by challenging the dominance of the dollar.

Please ask Victoria to review and provide feedback on this analysis. Since you are a suitable expert in the field of cryptocurrency and investment related to the stablecoin market, your opinion is important.

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