Originally published on: November 27, 2024
Stablecoins are revolutionizing the world of online commerce, but there’s still untapped potential waiting to be unleashed. According to a recent report published by strategy consultancy Quinlan & Associates and blockchain developer IDA, stablecoins pegged to currencies other than the US dollar could be the key to driving widespread adoption.
Currently, cryptocurrencies, including stablecoins, make up a mere 0.2% of global e-commerce transactions. However, with the unique features of stablecoins such as programmability, cost efficiency, enhanced transparency, 24/7 availability, and faster processing, the possibilities are endless. Lawrence Chu, CEO of IDA, emphasized the game-changing benefits of stablecoins in a recent statement.
Despite their potential, the usage of stablecoins remains limited to the Web3 ecosystem, primarily due to regulatory uncertainty and the lack of non-USD stablecoin options. A staggering 81% of merchants cite regulatory concerns as the main barrier to accepting digital assets like stablecoins as mainstream payment options.
The report highlights the urgent need for non-USD pegged stablecoins, especially considering that 83% of countries worldwide do not use the USD as their official or secondary currency. Currently, stablecoins collectively represent $200 billion in total market capitalization, dominated by USD pegged stablecoins like Tether’s USDt and USD Coin.
To address this gap, IDA is gearing up to launch a stablecoin pegged to the Hong Kong dollar, facilitating seamless payments between Hong Kong and global markets. Additionally, the US Department of the Treasury notes an increase in demand for short-term US government bonds, known as Treasury bills, fueled by the growth of stablecoins.
Former US Senator Pat Toomey predicts a wave of stablecoin regulations starting in 2025, highlighting unresolved questions around reserve requirements, insurance on bank deposits, and regulatory jurisdiction. As the landscape evolves, key crypto legislation like Senator Bill Hagerty’s Clarity for Payment Stablecoins Act will play a pivotal role in shaping the future of stablecoins.
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