The stablecoin market saw its biggest decline in nearly four years last month.
That’s according to A a report on Sunday (July 12) by CoinDesk, which described the contraction as a sign of declining cross-chain liquidity as cryptocurrency markets continue to consolidate near their lowest levels this year.
The report said that the market value of stablecoins fell by $7.7 billion in June. This is the largest dollar amount since May 2022, when the collapse of the Terra-Luna blockchain led to the so-called “crypto winter.”
The report added, citing data from RWA.xyz. That’s a roughly 3% decline on a percentage basis, the biggest downward trend since 2023, but still less than the 26% decline we saw in 2022.
CoinDesk calls this setback notable because it goes against optimistic expectations about the growth of stablecoins from the banking world. For example, City Revised its 2030 stablecoin growth forecast to $1.9 trillion in its base case and $4 trillion in its bullish case, up from forecasts respectively. $1.6 trillion and $3.7 trillion.
While the decline may seem dramatic, the report describes it as modest compared to historical standards. Stablecoins saw a much larger decline in 2022 during the period Explosions From cryptocurrency exchange FTX and lenders Celsius, BlockFi, and Genesis.
At that time, the market capitalization of major stablecoins fell 26% from about $166 billion in March 2022 to $122 billion by September 2023 as investors fled the cryptocurrency space.
In other stablecoin news, PYMNTS wrote last week about an obstacle facing the coin Mainstream business prospects: Whether Treasury departments “are able to address it without dismantling the systems that already manage billions of dollars in daily cash movements.”
The report added that this question comes at the appropriate time, given recent times Fired OpenUSD Consortium. Instead of focusing on issuing yet another stablecoin, this initiative aims to give companies tools to mint and redeem stablecoins and integrate them into enterprise operations.
“the connective tissue“It is supposed to allow financial departments to treat token dollars as another treasury instrument rather than a separate technology project,” PYMNTS wrote.
As covered here in April, the Federal Reserve Bank of Kansas City found that payment activity is offsetting less than 1% of use of stablecoins, while most of the supply remains dormant or is traded within cryptocurrency markets rather than for commercial payments. Meanwhile PYMNTS intelligence found that more than 40% are middle market companies We’ve discussed or tested stablecoins, but only 13% of these companies actually use them.
