The anticipated change in stance from US regulators will drive a huge boost to global stablecoin adoption, which is already rapidly gaining traction as their share in cross-border and business-to-business payments grows, according to Michael Shaulov, CEO of Fireblocks.

Shaulov made the comments on Tuesday at the company’s third annual SPARK conference in Barcelona, where he told delegates that the digital asset industry is preparing for a “fairly significant” transformation next year as a more crypto-friendly government and regulatory attitude is expected to prevail.  

Stablecoins are already on a tear. In 2024, the share of stablecoins versus other cryptocurrencies grew significantly, and about half of the $3tn worth of transactions handled by the Fireblocks Network in the last year consisted of stablecoins, Shaulov said in his keynote address, adding that the Network processes around 10% of transactions in the almost$200bn stablecoin market. He also noted that payments were the fastest-growing segment for Fireblocks, with activity concentrating on cross-border business-to-business transactions. 

The stablecoin space has seen significant growth this year, with its market capitalization up by 60% since the start of January. Tether, the largest stablecoin by market cap, has led the surge with a 50% growth in 2024, its expansion supercharged following the results of the US elections. 

The growth of the stablecoin market is expected to continue, Shaulov said, noting that 18 out of the top 25 global payments companies have some type of stablecoin project, with more in the pipeline as the regulatory environment in the US shifts.

Paolo Ardoino, CEO of Tether, agreed with Shaulov on the positive outlook for stablecoins, calling them a key tool for the future of finance.

“Stablecoins are going to be the most important technology for money in the next few decades, and there will be a consolidation of blockchains and layer-2s. The most important part is distribution, and blockchains that don’t have sufficient distribution will not see the same success,” Ardoino told SPARK delegates in a guest address.

Tokenization and money market funds

CFTC Commissioner Caroline Pham, another guest speaker, reminded the audience that the regulator’s Global Markets Advisory Committee approved a recommendation for the tokenization of non-cash collateral and how to apply existing US laws and regulations to these processes.

This is a significant step that lays the groundwork for more widespread application of tokenized assets as collateral in the global financial system, paving the way for scaling the technology that has only achieved baby steps so far. Shaulov said that momentum is building around tokenization, which has been another area of strong growth, with a 5-fold increase in these projects on the Fireblocks Network.

“We’re seen interesting growth, specifically in the area of tokenized money market funds, where the market has grown from nearly zero at the start of the year to $2.5 billion. This is still just a fraction of the $27 trillion U.S. Treasuries market – a reminder of the enormous untapped potential that lies ahead,” he said. 

He warned, however, that finding the right talent, maintaining operational resiliency and a high bar when it comes to compliance are all crucial for the industry, especially in light of the increasing sophistication of cyber criminals.

“Without the right talent and people in place, mistakes are going to be made, and those mistakes are going to be costly,” he added.