Summary
TLDR: Stablecoins are becoming more interest-bearing by backing them with real-world assets. They need to function as a medium of exchange, a store of value, and a unit of account to continue growing. Regulatory hurdles may affect their future growth, but opportunities in on-chain capital markets and transactions in emerging markets could help overcome these challenges.
Key Points
1. Stablecoins currently account for over 70% of all transaction volumes on blockchains today, with a market value of over $13 billion and steady growth over the past five years.
2. To continue growing sustainably, stablecoins must meet three core functions: functioning as a medium of exchange, acting as a reliable store of value, and serving as a unit of account for pricing goods and services.
3. Regulatory considerations pose a major hurdle for stablecoins in navigating the changing regulatory landscape, with policymakers viewing stablecoins as a nuisance rather than a fundamental opportunity. However, potential areas for growth include on-chain capital markets and transactions in emerging markets.