After 18 months of contraction, the global stablecoin market is undergoing a powerful resurgence. Galaxy Digital‘s latest research underscores that this revival is not merely cyclical but is instead rooted in structural shifts. The supply of stablecoins is expected to hit $300 billion by the end of 2025 and could swell to $1 trillion by 2030.

Three driving forces underpin this growth: adoption of stablecoins as (i) savings instruments in emerging markets, (ii) alternative payment tools, and (iii) high-yield instruments in DeFi ecosystems. These trends are reshaping not only digital finance but the global monetary landscape.

Trend 1: Stablecoins as Dollarised Savings Tools

Emerging markets have become fertile ground for stablecoin adoption. Countries like Argentina, Turkey, and Nigeria, plagued by inflation, currency volatility, and capital controls have seen strong demand for stable, dollar-pegged assets. Traditional access to US dollars in these regions has been limited due to capital restrictions and underdeveloped financial systems. Stablecoins such as USDC and USDT offer a seamless, internet-based solution.

In Argentina, where government-imposed controls (Cepo Cambiario) restrict access to dollars, stablecoins offer financial autonomy. Surveys show that nearly half of emerging market users adopt crypto primarily to save in US dollars or convert local currency into USD-backed assets. Castle Island Ventures found that 47% of respondents cited dollar savings, and 39% cited FX conversion as primary use cases.

Apps like Lemoncash, RedotPay, Reap, and GnosisPay have responded with payment card integrations, enabling users to spend stablecoin balances through Visa or Mastercard networks. Lemoncash alone accounted for $125 million in deposits in 2024, representing 30% of Argentina’s centralised crypto market and rivaling Binance. This is a clear signal that stablecoins are becoming the new financial backbone in weak currency economies.

Despite appearing modest in scale, stablecoin AUM in Argentina could easily exceed $1 billion, making up over 2.6% of M1 money supply. Extrapolated globally, the demand for stablecoins in emerging economies is not just substantial but transformative.

Trend 2: Payments Evolution and the SWIFT Challenge

Stablecoins are rapidly establishing themselves as viable alternatives to traditional cross-border payment networks. While domestic payments often clear in real-time, international transactions via SWIFT remain slow, costly, and opaque. Stablecoins eliminate these frictions, acting as meta-platforms for international payments.

A recent Artemis report found that B2B stablecoin payments generated $3 billion in monthly volume among just 31 companies, annualising at $36 billion. Galaxy estimates this figure could be north of $100 billion when accounting for all non-crypto market players. Importantly, B2B stablecoin payment volumes quadrupled between February 2024 and February 2025, confirming a steep growth curve.

These trends aren’t simply anecdotal. They signal a major structural pivot in the global payments landscape. The absence of traditional intermediaries enables 24/7 transfers with lower fees, particularly appealing for businesses operating in multiple currencies. The implications for the legacy financial system are profound, as stablecoin networks gradually erode the moat of SWIFT.

Trend 3: DeFi and the Search for Yield

DeFi (Decentralised Finance) is perhaps the most underappreciated driver behind the stablecoin revival. Platforms like Aave, Maker, Compound, and newer entrants like Ethena and Morpho provide interest rates often exceeding those of traditional Treasury yields. This DeFi-native demand for stablecoins as collateral and yield-generating assets accelerates stablecoin supply expansion.

Galaxy’s earlier research showed that spreads between DeFi lending rates and U.S. Treasury yields directly affect Total Value Locked (TVL) in DeFi protocols. When DeFi yields rise, stablecoin capital pours into these platforms; when yields fall, TVL contracts.

What’s unique is that DeFi yields are not static, they evolve with the innovation cycles of crypto. In 2020 it was yield farming, in 2021 basis trades, and in 2024 Ethena’s delta-neutral yield strategies. Stablecoins become essential instruments for tapping into these micro-market opportunities, further entrenching their role in capital formation.

Moreover, tokenised money market funds, such as those launched by Franklin Templeton, add legitimacy and further reduce yield volatility, bringing a layer of TradFi security into DeFi.

Banking System Disruption: The Quiet Exodus of Deposits

As stablecoins gain traction, traditional banking models face a silent but serious threat. Stablecoins bypass banks altogether, allowing users to store value in digital dollars backed by U.S. Treasury securities or deposits in major U.S. banks.

Consider the example of a user in Argentina transferring their ARS 20,000 savings into USDC. That capital shifts from Banco de la Nación Argentina to a combination of short-term U.S. Treasury securities and deposits at institutions like BNY Mellon and Cross River Bank. This migration drains the deposit base from regional banks, directly impacting their ability to lend and generate net interest income.

Galaxy’s analysis shows that stablecoins concentrate credit in fewer, larger financial institutions and U.S. government debt markets, reducing the availability of capital for domestic economic activity in EM regions.

Credit Intermediation and Systemic Implications

Traditional banking relies on the fractional reserve system, where deposits are multiplied into loans. The ‘money multiplier’ defines a banking system’s ability to create credit.

If stablecoin adoption in EMs rises to 10% of M1, the impact on domestic credit creation could be significant. For instance, replacing $20,000 in bank deposits with USDC reduces Argentina’s credit capacity by tens of thousands of dollars, redirecting that capital to U.S. Treasuries and repurchase agreements.

This dislocation is a double-edged sword: it benefits U.S. capital markets while constraining local credit markets. Over time, regulators may be forced to step in to maintain monetary stability and credit availability in their regions.

Stablecoin Issuers as Institutional Investors

With nearly $61 billion in USDC reserves, Circle is already a formidable player in capital markets. If stablecoin reserves reach $1 trillion by 2030, as Galaxy predicts, issuers will become top five buyers of U.S. Treasuries. Such concentrated, price-insensitive demand could distort yield curves, particularly at the short end of the curve.

Furthermore, stablecoin issuers could evolve into non-bank financial institutions (NBFIs), participating in private credit, mortgage-backed securities, and commercial loans. By outsourcing these functions to asset managers like BlackRock, Apollo, or KKR, they could mirror the post-Basel III rise of institutional lending platforms.

The On-Chain Asset Management Frontier

Stablecoins are not just off-chain financial assets; they also serve as programmable, on-chain units of value. New yield products like Aave-USDC, Ethena USDe, Maker’s sUSDS, and Superform’s superUSDC allow users to earn returns without converting back to fiat.

This opens the door for region-specific credit markets on-chain. Imagine a treasury product that lends USDC directly to small businesses in Argentina or Turkey. With lower operational costs, these platforms can offer competitive yields while filling the lending gap created by declining regional bank activity.

In 2024, Ethena’s integration of basis trading with USDe introduced a new era for dollar-denominated on-chain yield. As such strategies gain traction, we’re witnessing the emergence of an “effective frontier” for on-chain yields, an entirely new asset class.

A Paradigm Shift in Motion

Stablecoins and DeFi are not peripheral innovations, they are central to the transformation of global financial infrastructure. From enabling financial sovereignty in emerging markets to offering superior yields and redefining payment rails, stablecoins are laying the foundation for a new era of decentralised capital markets.

With projections placing stablecoin assets at $1 trillion by 2030, the implications for traditional banking, monetary policy, and international capital flows are immense. As stablecoins become more integrated into everyday finance, institutions, regulators, and users alike must grapple with a new financial paradigm, one where credit creation, asset management, and capital flows are increasingly dictated not by banks, but by code.