Wall Street is inching closer to massive stablecoin adoption.
That’s according to Matt Hougan, Bitwise’s chief investment officer, who argued that the potential approval of the Genius Act this week will trigger a 10-fold spike in the stablecoin market.
A majority of Senators voted on Monday to advance the Genius Act to a final vote.
Hougan’s argument? The provisions of the bill — such as issuer registration with federal banking regulators, anti-money laundering restrictions, and regular audits — will incentivise the likes of JPMorgan, Visa, and Bank of America to tap into stablecoins.
“I expect this will be a $2.5 trillion market in no time,” Hougan wrote in a Tuesday note.
In April, Citigroup analysts predicted that the stablecoin market is on course to reach $3.7 trillion in value in five years — that’s almost $300 billion more than the value of the cryptocurrency market.
Hougan’s comments come as the total stablecoin market reached a record value of $244 billion this week, according to DefiLlama.
TradFi’s crypto embrace
The importance of the prediction shouldn’t be underestimated.
Fast-moving fintechs like Robinhood, PayPal, Stripe have tapped into stablecoins, adding those services to their existing crypto offerings.
Banks have been more hesitant. By their nature, they take a cautious approach to new technology, especially ones that have a reputation for being a favourite tool of criminals.
But things are changing. US President Donald Trump touts pro-crypto sentiments — alongside the marketing of his own memecoin — and his administration’s new stable of regulators have halted lawsuits against the industry while relaxing rules regulating it.
That’s had an impact. Financial institutions like Bank of America have flagged openness to accepting stablecoin payments.
But Hougan said stablecoin adoption is a gateway drug to the big payoff — tokenised stocks, bonds and other financial assets.
Bitwise’s CIO predicted that the passing of the Genius Act, if it happens, will lead to over $100 trillion of financial assets moving onchain.
He’s not alone in that vision. BlackRock and Robinhood executives have also championed tokenised assets as a key milestone for the industry.
Crypto market movers
Bitcoin is up 1.2% over the past 24 hours to trade at $106,456.
Ethereum is up 0.5% to trade at $2,542.
What we’re reading
Javier Milei shuts down Libra memecoin investigation — but it’s not over yet ― DL News
Stablecoin Bill Passes Key Hurdle: Dems Join GOP To Deliver a Crypto Win ― Unchained
Theta Capital Secures $175 Million for Crypto Fund Investments — Bloomberg
This is a wake-up call (not a crisis) — Milk Road
Latest Solana trend Internet Capital Markets fuels $2.8bn token trade ― DL News
Eric Johansson is DL News’ News Editor. Got a tip? Email at [email protected].
