Analysts at Goldman Sachs foresee the onset of a “gold rush” in the stablecoin market, which could fundamentally transform the modern financial sector. According to the bank’s experts, the market capitalization of this sector has already reached $271 billion and has all the prerequisites for further rapid growth.
This is reported by Finway
Growth prospects for stablecoins and the role of USDC
The Goldman Sachs report emphasizes that stablecoins are gradually moving beyond cryptocurrency exchanges and becoming an integral part of payment systems. The bank notes that the growth of USDC’s market share, especially outside the Binance platform, will be significant due to new legislative initiatives that promote the legitimization of this market. It is projected that the volume of USDC will increase by $77 billion between 2024 and 2027, demonstrating an average annual growth rate of 40%.
“We believe that USDC will benefit from the growth of its market share outside the Binance platform, in light of legislative initiatives that legitimize the ecosystem. Based on current trends, we forecast a $77 billion increase in USDC or a 40% average annual growth rate between 2024 and 2027,” the Goldman Sachs report states.
Goldman Sachs believes that in the long term, the stablecoin market could exceed trillions of dollars, as payments remain a key driver of its development. According to estimates by Visa, the global payment market is about $240 trillion annually, of which $40 trillion is attributed to consumer spending. Currently, most transactions involving stablecoins are conducted for crypto trading and to meet dollar demand outside the United States.
Impact on the government bond market and analysts’ opinions
U.S. Treasury Secretary Scott Bessen previously emphasized that stablecoins backed by dollars or treasury securities will play an important role in shaping demand for U.S. government debt. Since stablecoins must be backed by real dollars or bonds, their proliferation automatically stimulates an increase in demand for government securities.
A study by the Bank for International Settlements found that an inflow of funds into stablecoins by two standard deviations could reduce the yield on three-month treasury bills by 2-2.5 basis points within 10 days. At the same time, an outflow of funds impacts the market even more, increasing yields by 2-3 times more than during an inflow.
However, not all experts share such optimism. UBS analyst Paul Donovan believes that stablecoins do not create additional demand for government debt, but merely redistribute the money supply. He emphasizes that purchasing stablecoins by selling treasury securities, which are then reinvested in the same bonds, does not affect the overall demand for U.S. debt instruments.
“U.S. Treasury Secretary Bessen is reportedly enthusiastic about how stablecoins could increase demand for short-term bonds, helping to finance the unsustainable budget position of the U.S. However, stablecoins are more about redistributing the money supply. If someone sells treasury securities to buy stablecoins, and those are reinvested back into treasury bonds, it does not change the overall demand for U.S. debt instruments.”
Overall, American financial authorities and leading institutions like Goldman Sachs view stablecoins as a new foundation for the financial system. At the same time, some experts consider their impact on the government bond market to be limited or neutral.
Additionally, it should be noted that the U.S. Securities and Exchange Commission has allowed stablecoins to be classified as cash equivalents, which contributes to the further legalization and development of this segment of digital assets.