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Overcollateralized stablecoin issuers like Tether and Circle are collectively the world’s 18th-largest buyers of US government debt.
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Stablecoin issuer Circle has donated $1 million USDC (USDC) to President-elect Donald Trump’s Inauguration Committee, Circle CEO Jeremy Allaire wrote on Jan. 9.
According to the CEO, the acceptance of the donation by the President-elect’s Inauguration Committee represents a maturation of the nascent asset class.
Data from RWA.XYZ shows that stablecoins currently have a market capitalization of approximately $203 billion, with USDC commanding $44 billion of the total.
Trump will assume office on Jan. 20. Industry executives have voiced widespread optimism for the second Trump administration in anticipation of pro-crypto legislation and comprehensive regulatory reform.
Source: Jeremy Allaire
Related: USDC market cap is up 80% from 2023 lows
Stablecoins become a cornerstone crypto policy issue
United States Senators Kirsten Gillibrand and Cynthia Lummis co-sponsored the Lummis-Gillibrand Payment Stablecoin Act in April 2024.
Upon introducing the bill to the Senate, Senator Gillibrand wrote “Passing a regulatory framework for stablecoins is absolutely critical to maintaining the US dollar’s dominance.”
In June, Paul Ryan, the former US speaker of the House, wrote that stablecoins could alleviate the national debt crisis and protect the dollar’s role as the global reserve currency.
Current stablecoin market overview. Source: RWA.XYZ
The former politician argued that issuers of overcollateralized stablecoins, which collectively hold more than $120 billion in short-term US government securities, would help drive demand for US government debt.
Following Ryan’s op-ed, Senator Bill Hagerty introduced the Clarity for Payment Stablecoins Act in October to create a comprehensive regulatory framework for stablecoins.
Included within the bill was a provision to regulate stablecoin issuers with less than $10 billion in market capitalization at the state level rather than the federal level.
Crypto VCs eye stablecoins in 2025
Guy Young, founder of Ethena, predicted that the stablecoin sector would reach a market capitalization of $300 billion in 2025 — driven by incumbents like Tether and Circle.
Deng Chao, CEO of institutional asset manager HashKey Capital, recently told Cointelegraph that stablecoins are one of the main digital asset classes venture capitalists are eyeing for potential investments in 2025.
Chao said that VCs were increasingly focused on stablecoins in emerging market economies due to their proven use case of providing banking services to the global unbanked population.
Magazine: Bitcoin payments are being undermined by centralized stablecoins
This article first appeared at Cointelegraph.com News
