Andrew Bailey, the governor of the Bank of England, has most recently issued the warning against banks issuing stablecoin, arguing that the BOE should focus on tokenizing deposits.
During an interview with the Sunday Times, the Bank of England official said that stablecoins have introduced systemic risks to banking institutions that could destabilize the entire financial ecosystem, causing sovereign governments to lose control over their currencies.
Further noting that the United Kingdom Central Bank should not adopt a CBDC (Central Bank Digital Currency) or otherwise intend to launch a centrally managed digital fiat token.
In simple words, stablecoins are a type of blockchain-based product designed to maintain the peg of the traditional currency in backing. As of writing, there are more than 500 stablecoins, and in terms of market capitalization, USDT stands at the top, followed by USDC.
Following Donald Trump’s historic victory, the digital asset market has experienced a significant boost, with a particular focus on establishing rules for stablecoins.
How big is the global stablecoin, and why is it peaking?
According to the data from CoinMarketCap, the global stablecoin market has a market capitalization of $261,716,680,091, and the trading volume is $188,268,793,585.
As per several estimates, the global stablecoin market is expected to reach $1 trillion by the end of 2030, and by 2035, it is believed to surpass $1.108 trillion.
The market is peaking due to dozens of factors, including technological, economic, regulatory, and institutional factors. Stablecoins are the backbone of DeFi, providing liquidity for lending, borrowing, and yield farming with minimal volatility.
Ethereum-based stablecoins dominate the stablecoins market due to their integration with the DeFi ecosystem, while multi-chain stablecoins and Layer 2 solutions are growing rapidly to address scalability and interoperability needs.
The development of robust infrastructure, such as wallet compliance tools and payment rails, is enabling scalable implementation.
A quick update on the crypto market
As of writing, the crypto market cap stands at $3.81 trillion, with a 3.39% surge in the past 24 hours. The trading volume is $198.11 billion. The crypto fear and greed index currently stands at 70, indicating a market sentiment of greed.
Bitcoin is trading at $123,077 with an intraday increase of 4.3% and its market capitalization is $2.44 trillion, and trading volume is $103.19 billion.
At the same time, Ethereum is at $3,041 with a weekly surge of 18%, and its market cap has reached $366.98 billion, and the trading volume is $24.45 billion.
