According to CoinDesk: Stablecoin Holders Nearing 100M Mark in 2024, As Per Data
The stablecoin market is experiencing a surge in popularity, with the number of holders almost hitting the 100 million mark, as per data from rwa.xyz. This year, the number of addresses holding stablecoins has increased by 15%, making the count more than 93.6 million, a record high.
Stablecoins are cryptocurrencies anchored to an external asset like the U.S. dollar, with three primary categories: fiat-backed, crypto-backed, and algorithmic stablecoins. Currently, there are 35 stablecoins, boasting a combined market cap of $157 billion.
Dominating the sector is Tether (USDT), accounting for over 80% of stablecoin addresses with a whopping market cap of $114.07 billion. During the 2024 crypto bear market, the number of holders continued to rise, due in part to the Federal Reserve's speedy interest rate hikes enhancing investor demand for the U.S. dollar and dollar-tied cryptocurrencies.
Also, the number of addresses transferring stablecoins is on the upswing. In March alone, active stablecoin addresses surpassed the 26-million mark for the first time, as per rwa.xyz. Nearly 77% of the addresses, representing significant retail investor participation, were based on TRON and Binance Smart Chain (BSC).
Contrary to their majority in active address counts, TRON and BSC capture a minor share of $ volumes, indicating their popularity among retail participants," as per OurNetwork’s April 23 edition. Ethereum and its competitor Solana accounted for the majority transfer volume, attributed primarily to their vast decentralized finance ecosystem.
A 2024 Federal Reserve report outlined several potential stablecoin uses, including cross-border payments, internal fund transfers, and liquidity management within firms. For example, in countries with high inflation like Zimbabwe and Nigeria, stablecoins serve as alternative means of payment, remittances, and stores of value assets. Meanwhile, in advanced economies, they're commonly used to purchase cryptocurrencies.
Regulation is potentially a key factor for stablecoin growth. The S&P 500 rating agency suggests that regulatory clarity could encourage banks to adopt stablecoins. Last week, U.S. Senators Cynthia Lummis and Kirsten Gillibrand proposed a bill regulating stablecoins.
S&P noted that under the proposed law, USDT, issued by a non-U.S. entity, wouldn't be considered permissible payment stablecoin. Therefore, tether's dominance might diminish, and users could likely switch to U.S.-issued stablecoins.
