Stablecoin Market Remains Limited Despite Rapid Growth

The Bank for International Settlements (BIS) has issued a report stating that stablecoins remain a niche market despite their rapid growth. The BIS argues that tokenisation should be integrated into the existing monetary system rather than replacing it.

The report notes that stablecoin issuance has increased sharply in recent years, but their use remains concentrated in crypto trading and decentralised finance. According to the BIS, the market capitalisation of stablecoins stands at around $320 billion, dwarfed by trillions of US dollars in bank deposits.

The BIS also points out that despite emerging frameworks for regulating these tokens across various jurisdictions, the lack of growth in non-dollar denominated stablecoins has remained minuscule. The report suggests that stablecoins face structural limitations that make them unlikely to become a dominant form of money.