The third quarter of 2024 saw a surge in stablecoin use and adoption, according to Coinbase’s 4th Quarter Guide to Crypto Markets report with Glassnode.
Stablecoins hit an all-time high market capitalization of nearly $170 billion in Q3 2024, according to the report. This growth occurred alongside the implementation of the European Union’s new Markets in Crypto-Assets regulation, which introduced clearer rules for stablecoin operations.
Stablecoins have become a key tool for users seeking faster, cheaper, and more secure transactions. Their utility in payment systems, including remittances and cross-border transfers, has continued to expand.
Recently, Anthony Pompliano argued that tech innovations outside of crypto could lead to a new era in which stablecoins become the primary transaction medium in a machine-driven economy. This increased adoption reflects the growing role of stablecoins in crypto trading and real-world financial systems.
According to the report, stablecoin volumes have reached nearly $20 trillion year-to-date as of the third quarter, indicating their growing role in the global economy.
Stablecoin and Bitcoin dominance
Stablecoin dominance also increased in Q3 alongside Bitcoin btc 2.6%, with crypto investors gravitating toward what they see as the highest-quality digital assets.
The current BTC cycle closely tracks the 2015-2018 and 2018-2022 cycles, which ended with nearly 2,000% and 600% returns, according to the report.
What is MiCA?
The Markets in Crypto-Assets Regulation is a comprehensive framework enacted by the European Union in June 2023 to regulate the crypto industry across its 27 member countries. It initiates a 12-18 month transition period for implementing rules on anti-money laundering, combating the financing of terrorism and digital asset custody, among others.
MiCA’s impact on stablecoins still remains to be seen, but Tether usdt 0.02% CEO Paolo Ardoino expressed concern that MiCA’s 60% cash reserve requirement for stablecoins could create systemic risks for European banks. He argued that such regulations might exacerbate liquidity issues during large-scale redemptions, potentially leading to bank failures.