Stablecoins could drive 40% growth into 2026: Circle CEO

Regulation is tricky in any industry. It can either spark competition or squash it entirely. Lately, the stablecoin market has been facing its own version of this, making everyone rethink how it fits into global finance.

On the upside, they’re bridging DeFi and TradFi, fixing TradFi’s slow spots with fast, on-time transactions. Meanwhile, banks are watching closely, as the recent “reward” debate has put the clash squarely into the spotlight.

Notably, Circle’s CEO isn’t buying it, brushing it off as “totally absurd.” In this context, with the Crypto Market Structure Bill’s markup coming up on the 27th of January, it’s clearly shaping up to be a big week for the market.

Source: DeFiLlama

The bill, focused on rewards, could reshape the future of stablecoins. 

Technically, stablecoins have already hit a record $300+ billion market cap, showing just how dominant they’ve become in crypto. But if the bill gets approved, it would let firms like Circle offer rewards to HODLers.

Why does this matter? Think about how banks pay interest to keep deposits sticky and grow revenue. In a similar way, rewards could help Circle boost adoption, lock in liquidity, and expand its revenue base.

Ultimately, the real question is: What does this mean for digital assets?

Stablecoin expansion looms, raising the stakes across L1s 

Despite the noise, Circle’s CEO is staying bullish on stablecoins. 

Speaking at Davos, Jeremy Allaire called a 40% CAGR a base case, pointing to USDC supply growing roughly 80% year over year for two straight years, a clear proof that stablecoin use cases are scaling fast.

Right now, with the market sitting around $315 billion, a 40% jump could push it to about $441 billion.  In turn, this ramps up the stakes across L1s, with Ethereum [ETH] positioned to benefit the most.

Source: DeFiLlama

As the chart shows, Ethereum currently holds $160 billion in stablecoins. That’s 50%+ of the total market. As a result, it remains the most dominant L1 in terms of liquidity, driving strong activity across the network.

In this context, the upcoming Crypto Market Structure Bill markup is a big one. With RWA, NFTs, and other sectors scaling fast, this move could set the tone for the whole digital asset ecosystem, not just stablecoins.

Hence, 2026’s growth cycle could very well be powered by these assets.

Final Thoughts

• Stablecoins are bridging DeFi and TradFi. But the upcoming Crypto Market Structure Bill could reshape the market.
• Ethereum holds over 50% of stablecoin supply, making it the dominant L1. As sectors scale, this decision could set the tone for the entire digital asset ecosystem.