Introduction
Despite garnering less attention than the crypto juggernauts of Bitcoin and , recent developments have made the environment for stablecoins more promising and appealing. Stablecoins are a type of cryptocurrency whose value is pegged to another asset, such as a fiat currency or gold (Coinbase). By being pegged to another asset, stablecoins remain relatively stable in value, serving as an alternative to high volatility cryptocurrencies. Furthermore, their placement on the blockchain but with ties to traditional assets, stablecoins may serve as a bridge of common ground between the two worlds of traditional and decentralized finance.
Stablecoins
Stablecoins, although similar in utility, often vary by the asset to which they are pegged. The most popular asset is the U.S. dollar, which serves as the base of both Tether’s USDT and Circle’s USDC. Other types of collateral-backed stablecoins are linked to other cryptocurrencies or commodities. Crypto-collateralized stablecoins are pegged to other crypto assets, but they are over-collateralized (more reserves than market value of stablecoin) to avoid any volatility caused by price changes in said cryptocurrencies (Shields). Stablecoins backed by commodities often have a conversion, such as one token per one troy ounce of gold, where the digital currency derives its value from a physical asset in possession of the issuer (Shields). Aside from stablecoins being backed by an asset, some stablecoins are run by an algorithm, which controls the supply of the token in response to demand, which, although susceptible to swings, maintains a relatively stable price (Christian).
Adoption
Individual adoption of stablecoin has significantly grown in the last year, with the number of wallets increasing by 53% (19.6 to 30 million) from February 2024 to February 2025 (Reguerra). The same report found that over this time period, the total supply of stablecoins grew in value from $138 to $225 billion, an increase of 63%. A recent increase to a capitalization hovering around $250 billion, meaning roughly 10% of all U.S. dollars in circulation is represented by stablecoins (Morningstar). An adoption at this level demonstrates the demand for and momentum behind stablecoins.
As consumers continue to make this push, companies are expected to follow suit. Multiple financial companies have either launched their own stablecoins or have announced their intentions to explore the possibility of doing so. Most of this activity has belonged to financial institutions like JP Morgan, Fidelity, and PayPal, recent reports have announced many other companies, such as Amazon and Walmart, are exploring launching their own stablecoins, or, at a minimum, adopting the acceptance of stablecoin payments (Sinha).
Applications
Considering the rapid rise in use of stablecoins, understanding their applications is imperative. Most of the improvements introduced by stablecoins involve transactions, specifically in speed and fees. Transactions using stablecoins can be processed and its money can be settled in minutes rather than days, expediting the payment process to improve efficiencies (Barbaravičius). Similarly, high fees associated with credit cards or bank wirings are essentially eliminated, making transactions cheaper for both parties (PYMNTS). These benefits are typically observed in the context of small businesses or people sending remittances abroad, processes on which many people rely for a living.
Senate Bill
Recent news from Capitol Hill revolved around the passing of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, which established a federal framework for regulating stablecoins, including requirements like the backing of all stablecoins with liquid assets (Saini). Many view this approval as a step to legitimize the sector and help propel its growth, as displayed by the market’s reaction with a soar in Circle’s stock price (CRCL) after its IPO (+700% at its high).
Lucrisma
All of the aforementioned points in the direction of a future with stablecoins. Indicators suggest there will be a greater need to own a wallet as its applications and adoption begin to grow. Lucrisma provides a perfect balance to getting involved in the space. If you do not already own stablecoins via a wallet or crypto account, Lucrisma makes the addition easy. Simply sign up for one with another supplier, and add it to your Lucrisma dashboard. Although you are involved in a transition to a decentralized finance account, your overall financial life is not disrupted, as you can conveniently monitor it alongside the traditional accounts you already have, adding countless opportunities without any hassle.