Stablecoins going mainstream? What might signal an inflection point for these digital currencies

The global stablecoin market surpassed the US$300 billion (S$389 billion) mark for the first time on Oct 3, representing a 73.8 per cent year-on-year growth, according to data tracker DeFiLlama.

This momentum is expected to continue into 2026, with large financial institutions developing their own stablecoin-based products, said Nick Robnett, head of Crypto Business Development at US-based crypto firm Paxos.

That will be one of the key signals, he added, that stablecoins are shifting from being primarily “crypto rails” – infrastructure to move money across the crypto market – to cash equivalents integrated into traditional finance.

Stablecoins are a type of digital currency designed to maintain a stable value by being pegged to an external asset like the US dollar. It has the potential to simplify cross-border payments with round-the-clock, instant transactions.

“We’re on the precipice of a huge explosion of stablecoins, but certain building blocks are still required,” noted Robnett.

The gaps to be addressed, he added, include institutional regulatory clarity, secure infrastructure for storage and management of digital assets, easier conversion between stablecoins and traditional money, and networks of trusted partners.

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Paxos operates in Singapore as Paxos Digital Singapore, which received approval from the Monetary Authority of Singapore in June 2024 to offer digital payment token services as a major payments institution.

Its Singapore entity launched the Global Dollar (USDG) stablecoin, pegged to the greenback, in November that year.

Evolving regulations

Robnett credited the stablecoin market’s expansion, in size and activity, partly to legislation like the Genius Act and the Markets in Crypto-Assets (Mica) regulation.

The Genius Act is the US’ stablecoin bill, signed into law in July 2025. Mica is the European Union’s (EU) regulatory framework for crypto assets, which came into full effect in December 2024.

These, he said, “have opened the floodgates for companies to resolutely move into this space and discover how they want to participate.”

Paxos started issuing USDG in the EU in July 2025, in compliance with Mica and under the supervision of Finland’s Financial Supervisory Authority.

The company’s Global Dollar Network, a stablecoin consortium powered by the USDG, has over 80 members including crypto exchange OKX and financial services platform Robinhood.

USDG has a market capitalisation of US$986 million as of Oct 31. It is issued on blockchains Ethereum, Solana, X Layer and Ink.

Building blocks needed

Despite this growth, a 2025 McKinsey & Company analysis noted that stablecoins account for less than 1 per cent of global money flows, facilitating about US$30 billion in daily transactions.

While institutional interest is rising, Robnett observed that “we’re still in the scoping and due diligence phases”.

“We’re making progress on all of these fronts, but there is still work to be done,” Robnett said.

This was produced in partnership with the Monetary Authority of Singapore and the Global Finance & Technology Network.

For more stories, go to https://bt.sg/sff2025