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Core Thesis Stablecoins are rapidly evolving beyond their initial role as trading tools on crypto exchanges (dominated by Tether and Circle) to becoming critical infrastructure for the global financial system. Alchemy co-founder Joe Lau describes the current adoption rate as "exploding," driven by the unique advantages of 24/7 settlement and the speed of the internet.

Key Drivers of Adoption

  • Utility Over Speculation: Stablecoins are being integrated into "consumer and enterprise layers," offering tangible benefits that traditional banking struggles to match, such as instant, round-the-clock money movement.

  • Corporate Integration: Major payment processors (like Stripe), payroll providers, and corporate treasuries are actively incorporating stablecoins into their operational stacks.

  • Regulatory Clarity: As rules become clearer, traditional finance players (banks, neobanks, and fintechs) are entering the sector to leverage these rails for their existing use cases.

Wall Street's Bullish Outlook

  • Citigroup: Recently raised its 2030 forecast for the stablecoin market, projecting $1.9 trillion in a base case and up to $4 trillion in a bull case, noting the market is growing "faster than expected."

  • Morgan Stanley: Reported that the total stablecoin market capitalization reached $300 billion in September 2025, a 75% increase from the previous year.

The Rise of Tokenized Deposits The article highlights a parallel trend where traditional banks are launching tokenized deposits (e.g., JPM Coin) to offer similar benefits—speed and low fees—within a regulated, closed-loop banking environment.

  • Current State: Stablecoins and tokenized deposits are currently seen as complementary. Stablecoins are "open-ended" (settling between any two parties), while tokenized deposits are "closed-loop" (internal to a bank's client base).

  • Future Outlook: The boundary between the two is expected to blur. Stablecoin issuers may seek to become more bank-like for capital efficiency, while banks will expand their programmable infrastructure. Eventually, the two models will likely compete directly to modernize the global financial system.