From theblock by Daniel Kuhn

With the European Union’s Markets in Crypto-Assets Regulation framework coming into place and pro-crypto politicians coming into office in the U.S., experts say that there is about to be a virtual renaissance of the stablecoin industry, according to a panel discussion at The Block’s Emergence conference on Friday.

“You're going to see a lot more fragmentation in the market given that that's happening,” Vishal Gupta, founder of True Exchange and former head of USDC +0.014% at Circle, said during the "Are Stablecoins the Key to Mass Adoption?" panel. “You're going to see not just two stablecoins that matter, you're going to see a proliferation of them,” he added, referring to the top stablecoins by market capitalization USDT +0.075% and USDC.

It was a point echoed by Kevin Tharayil, head of special projects at the Celo Foundation, who noted that now that the infrastructure is in place to make launching stablecoins as easy as launching a memecoin on Pump.fun, there will be an explosion of “regional stablecoins” to support local currencies. 

There are the beginning traces of this happening already on the Celo blockchain with projects like decentralized stablecoin platform Mento, Tharayil said. Mento currently supports assets like cREAL, pegged to Brazil’s real, and eXOF, tied to the CFA franc shared by 14 countries in Africa.

“So these kinds of use cases, as we build, actually allow for a more diverse, more robust stablecoin ecosystem,” Tharayil said. 

Eduardo Morrison, a former Binance executive and founder of Schuman Financial, noted that his firm is particularly interested in tokenizing the euro, given the E.U.’s clear stablecoin regulations. In particular, he believes there’s untapped potential in connecting various cross-border corridors for corporate payments between regions like Latin America, Africa and the Middle East in connection to the European market.

Dollar domination

To date, the stablecoin industry has been dominated by USD-denominated tokens, whether or not those assets’ issuers are based in the U.S., like Circle and Tether, respectively. This has been a blessing and curse for the industry and global user base, the panelists argued.