Speculation or solution: Can stablecoins play a role in the FX world?
Stablecoins have been around for more than a decade and are back in the spotlight. Real-world applications are increasingly coming online as barriers like fragmentation are overcome and sound regulatory frameworks are established. Can stablecoins also play a meaningful role in FX and settlement?
From Bitcoin to stablecoins
The universe of crypto assets, which started with Bitcoin in 2008, has expanded far beyond 10,000 crypto assets. However, most crypto assets have very little economic relevance and are very small in size. In fact, the top ten crypto assets represent around 90 percent of the overall market, whose total market capitalization stands at around USD3.8 trillion (August 2025). Market share remains concentrated, with approximately 65-70 percent coming from the two largest coins: Bitcoin and Ethereum.[1] While the crypto asset ecosystem has grown over the years, its market capitalization hovers around 3 to 4 percent of the global gross domestic product.[2]
By design, most crypto assets do not have an issuer that could offer a degree of price stability, and this fuels their speculative dimension. Their smaller investor and liquidity base compared to traditional financial markets further amplifies their volatility, which historically ranges between 4 and 8 percent per day. For example, Bitcoin’s volatility is around four times higher than that of gold.[3]
In order to curb the high volatility of crypto assets, stablecoins emerged in 2014, but only gained traction in 2019, broadly coinciding with Facebook’s initiative for launching a global stablecoin (“Libra”, which was rebranded to “Diem” in 2020, and de-facto discontinued in 2022). Today, stablecoins account for less than 10% of the total crypto asset market, with a market capitalization of around USD275 billion (August 2025).
While there are roughly 170 different stablecoins in existence worldwide, around 85-90 percent of the market capitalization currently comes from two coins: Tether (USDT) and USD Coin (USDC).[4]
So far, the broader markets for crypto assets and stablecoins have not moved out of their respective niches.
So far, the broader crypto assets and stablecoins markets have not moved out of their respective niches. The reasons might be manifold, ranging from a lack of strong use cases to the absence of sound regulatory and interoperability frameworks. Central bank sentiment around the creation of central bank digital currencies (CBDCs)[5] may also have played a role. CBDCs and most [6] stablecoins are fundamentally different from crypto assets, which often have no identifiable issuer.
According to a study from Citigroup,[7] stablecoins have the potential to reach a market capitalisation of USD3.7 trillion by 2030, more than 15 times higher than today. Some commentators believe that recent developments, as further discussed below, will now boost stablecoins.
Authors:
Emanuel Vila / Director, Strategy and Innovation, CEO Office
Dirk Bullmann / Managing Director, Public Policy, Strategy and Innovation, CEO Office
Contributors:
Sophie Dalzell, Assistant Vice President, Strategy and Innovation, CEO Office
Joshua Sarpong, Assistant Vice President, Strategy and Innovation, CEO Office
1 Source: www.statista.com.2 Global GDP estimated at USD108trillion as of December 2024, according to World GDP, Trading Economics (December 2024).3 Comparing Bitcoin and Gold, NYDIG (April 2025).4 Tether is the world’s first stablecoin, issued by Tether Limited Inc. in 2014. USDC (USD Coin) was launched in 2018 by a joint venture between Circle and Coinbase, the latter taking over full governance in 2023. Both Tether and USD are pegged to the USD.5 Central bank digital currency (CBDC) is a form of digital money, denominated in the national unit of account, which is a direct liability of the central bank. A number of retail CBDCs are already in existence (e.g., the Sand Dollar issued by the Central Bank of the Bahamas, eNaira issued by the Bank of Nigeria, and Jam-Dex issued by the Bank of Jamaica).6 Not all stablecoins have an identifiable issuer, but most prominent ones do (e.g., USDC is issued by Circle, USDT is issued by Tether, and Paxos USD is issued by Paxos). A number decentralized stablecoins have no single identifiable issuer (e.g., DAI – issued by the MakerDAO protocol, governed by MKR token holders, GHO – issued by Aave DAU). 7 https://www.pymnts.com/cryptocurrency/2025/citi-stablecoin-market-could-hit-3-7-trillion-by-2030/
