This Year’s Focus on Stablecoins in the U.S.
The current year has emerged as a pivotal moment for stablecoins, particularly within the United States. Since the beginning of the year, there has been a remarkable transformation of stablecoins from experimental ideas in other countries into a significant market player, witnessing billions in daily transaction volumes. This surge has been accompanied by partnerships with major payment networks, active testing among U.S. banks, and heightened emphasis from U.S. financial regulators, particularly with the introduction of the GENIUS Act. Following the GENIUS Act’s enactment in July, Ernst & Young’s (EY) consulting arm, EY-Parthenon, conducted a survey involving over 350 executives across various sectors to gauge their perceptions of stablecoins. The resulting 31-page report outlines key insights regarding adoption rates, usage patterns, advantages, challenges, and regulatory considerations. Below, we summarize the report’s five key findings.
Stablecoins Are Gaining Mainstream Recognition
Every executive surveyed demonstrated awareness of stablecoins, with 13% confirming that they have utilized them. Furthermore, 65% of respondents anticipate an increase in interest toward stablecoins over the upcoming 6 to 12 months. This unanimous recognition indicates the rapid transition of stablecoins into the mainstream financial conversation. For banks and corporations, the dialogue surrounding stablecoins has shifted from the uncertainty of “if” they will be adopted to a focus on “how quickly” this adoption will occur and the strategic role organizations should adopt. This evolution from a niche concept to a general expectation suggests that institutions that delay action may lose the chance to influence standards and secure early market advantages.
Stablecoin Adoption on the Rise
The survey revealed that 54% of financial institutions and corporations that currently do not use stablecoins are planning to do so in the next 6 to 12 months. Additionally, 81% of participants expressed that the presence of clear and supportive legislation would enhance their interest in stablecoins, either significantly or to some extent. With over half of the firms indicating intentions to embrace stablecoins within a year, this trend could accelerate overall market adoption. For policymakers, this underscores the necessity of providing regulatory clarity to bolster adoption rates. Meanwhile, banks have a significant opportunity to enhance their service offerings by providing compliant, stablecoin-based solutions ahead of their competitors.
Cross-Border Payments Lead Stablecoin Use Cases
When asked about various potential use cases for stablecoins, the survey highlighted that cross-border payments were the most popular, with a particular focus on addressing ongoing challenges in this area. Despite innovations from alternative services like Wise, Remitly, and Revolut, international transfers remain characterized by slow processing times and high costs. Stablecoins present a viable alternative that appeals to both businesses and consumers, indicating that this sector could disrupt established correspondent banking systems and provide a competitive advantage for early adopters in cross-border transactions.
Cost Reduction and Speed Are Key Motivators
Among the different use cases examined, cross-border payments garnered the most interest, with 77% of respondents highlighting the importance of reducing transaction costs and enhancing payment speed. This strong emphasis on efficiency serves as a reminder that the success of stablecoins will hinge on their ability to deliver real value rather than relying solely on market hype. For businesses, even slight reductions in fees associated with cross-border transactions can yield substantial savings on a larger scale. Banks must tackle the challenge of using this efficiency to gain a competitive edge by offering better pricing and faster settlements while managing associated risks.
Organizations Seek Traditional Banking Partnerships
The survey indicated that organizations are increasingly turning to traditional banking partners for access to stablecoins, with 79% of financial institutions planning to utilize third-party services for stablecoin infrastructure. This trend is significant as it reflects a desire among businesses to engage with stablecoins without navigating the complexities involved in new payment systems. Rather than developing the technology in-house, companies are looking to established intermediaries, like banks, to manage the necessary infrastructure. For banks, this represents both an opportunity and a challenge; those that swiftly create dependable, third-party-driven stablecoin services can enhance client relations, while those that hesitate risk being left behind.
