Non-USD Stablecoins poised for explosive growth during 2025

The stablecoin market, traditionally dominated by USD-pegged assets, is witnessing a significant shift in 2025 with the rise of non-USD stablecoins.

There are a smorgasbord of new and established issuers across a variety of jurisdictions creating fiat-backed stablecoins for their respective national currencies. The shift to bring these on-chain reflects a global move towards embracing digital versions of local fiat currencies, enhancing financial inclusion for the unbanked, as well as opening up new opportunities to take on the traditional payment companies across many existing remittance corridors at a fraction of the cost.

Market Expansion and Diversification

As of early 2025, the total market capitalization of stablecoins has surpassed $200 billion, with some projections indicating a potential rise to $400 billion by year’s end. With billions in daily trading volume in the broader forex industrywith the most popular pairs against USD are Euro, Yen and Sterling. Central Banks also hold roughly 68% of their foreign exchange reserves in USD, although with de-dollarization occuring for a number of geo-political reasons, this is expected to reduce in the mid term.

The story is different on-chain, as USD-backed stablecoins like Tether (USDT) and USD Coin (USDC) lead the market with over 97% of volume, and have helped spawn the entire DeFi ecosystem around them. They face challengers though with the numerous non-USD stablecoins that are gaining traction, driven by regulatory developments and increasing demand for localized digital currencies.

Regulatory Developments Fueling Growth

The implementation of comprehensive regulatory frameworks, such as the European Union’s Markets in Crypto-Assets (MiCA) regulation, has provided clear guidelines for stablecoin issuers. This clarity has encouraged financial institutions to enter the market, offering services like custody solutions and even issuing their own stablecoins. USDT is also under attack in Europe, with both Binance and Crypto.com announcing that due to their failure to make it compliant with MiCA, they’re delisting it to EU customers . This only will accelerate a gradual decline in market share for Tether’s flagship token, set against a growing overall market cap for stablecoins in general.

Adoption in Payment Systems

Major payment processors such as Visa and Mastercard, as well as a growing number of neo-banks are enhancing their infrastructure to support stablecoin transactions, facilitating faster and more cost-effective cross-border payments under the hood. This integration is expected to drive significant growth in stablecoin-based payments, with projections estimating daily volumes reaching $300 billion. Stripe’s addition of stablecoins both for payments and payouts since their $1.1bn acquisition of Bridge, even if it’s only for a limited number of merchants at this time, gives a strong indication of how visible stablecoins will be in the year ahead, as businesses warm to the benefits of crypto, without the price volatility or on-chain fees that hindered adoption of other cryptocurrencies in the past with the likes of Steam. And PayPal has had its own foray into stablecoins with limited adoption of PYUSD.

Regional Developments

In the Middle East, Tether announced plans to launch a stablecoin pegged to the United Arab Emirates (UAE) dirham, aiming to meet the demand for the Gulf currency and offering an alternative to the U.S. dollar.

In Europe, the introduction of MiCA regulations is expected to facilitate the issuance of Euro and GBP stablecoins, with financial institutions preparing to launch their own regulated stablecoins to cater to regional markets.

In Latin America, companies like Mercado Libre and Transfero have entered the stablecoin market, reflecting a broader trend of tech and crypto groups seeking to profit from the stablecoin boom.

Down under, there are multiple stablecoins trying to establish themselves in Australia with AUDT and AUDDor in New Zealand with Techemynt’s NZDS, the latter seeing several millions in volume on Stabull’s Polygon DEX.

Meanwhile, Russia has made an about turn in their attitude towards crypto, so it’s likely only a matter of time before a sanction busting Ruble stablecoin appears.

And Africa, already a pioneer when it comes to electronic money, is seeing competing stablecoins coming to the market in Nigeria and South Africa.

Integration with Decentralized Finance (DeFi)

The rise of non-USD stablecoins is also influencing the decentralized finance (DeFi) ecosystem. Platforms such as Stabull Finance have established within this niche to cater for demand generated by the growing number of fiat-backed stablecoins.

These stablecoins provide new opportunities for simplified money transfer within and across borders, create new yield generation opportunities via participation in liquidity pools, open up a variety of lending platforms, and the various other DeFi services that will inevitably grow around them as they establish a user base and on-chain volume.

Many of the current AMM’s such as Uniswap have very poor liquidity for these stablecoins, with prices that can drastically diverge from their off-chain value as they only adjust when a trade occurs. When combined with a limited selection of other non-usd stablecoin pairs, it often means that users looking to easily swap between one currency’s stablecoin and another have to utilise multiple exchanges to complete their transaction. This is where it’s Stabull’s 4th generation AMM uses off-chain price oracles to keep the forex price close to off-chain values, which itself opens up opportunities for issuers to better maintain their fiat peg, and arbitrage opportunities where prices diverge between exchanges, but the fx rate moves.

Challenges and Considerations

Despite the promising growth, non-USD stablecoins face challenges, including regulatory compliance across different jurisdictions, ensuring transparency and security, and achieving sufficient liquidity and adoption to compete with established USD-backed counterparts. With Trump’s recent proclamation to outlaw CBDC’s in the US likely to have a knock on effect in other countries exploring them, stablecoins continue to look like being a growing and increasingly important segment of the market going forward.

Looking Ahead

The expansion of non-USD stablecoins in 2025 signifies a pivotal shift towards a more diversified and inclusive digital currency landscape. As regulatory frameworks evolve and adoption increases, these stablecoins are poised to play a crucial role in the global financial ecosystem, offering alternatives that cater to regional economic needs and preferences. Either way, it is likely that this year will see the announcement or release of lots more stablecoins, filling in more blanks on the map.