The deobank is powered by Stablecoins

Maksym S. Sakharov is the co-founder of WeFi and its group CEO. 

Tariffs and trade retaliation from other countries are causing the current market to experience a tailwind. However, so far market supporters say Trump’s tariffs were primarily meant as a strategy for negotiation, with minimal impact on business and consumers.

Investors are attracted by the uncertainty of the market 

The inflationary pressures, which could threaten the US Federal Reserve’s view on rate reductions, adds to the unpredictability. The market is also affected by the impending debate on the federal budget that will take place in Washington. 

The Treasury relies on the current debt ceiling to resolve the issue. “extraordinary measures” Meeting US financial obligations Analysts predict that these measures may be exhaust after the first three months. 

The administration’s proposal to eliminate the debt limit could be met with resistance by fiscal conservatives within Congress. Stablecoins are one area that is growing despite the macroeconomic uncertainties, according to a report. The volume of Tether’s USDt is largely driven by the flows.USDTUSDCUSDC). 

The market is dominated by stablecoins with dollar values 

Stablecoins started as an experiment — a programmable digital currency that would make it easier for users to enter the crypto market and trade different digital assets. After a decade, stablecoins are an important part of the digital financial system.

Market cap for stablecoins is now at $226 Billion, a new record. It continues to increase. This growth is driven by demand in emerging markets. Recent ARK Invest reports state that dollar-pegged stabilizecoins have a dominant position on the market. The dollar-pegged coins account for 98% or more of the total stablecoin market, and gold- and Euro-backed stablecoins are only a fraction of that.

The USDt stablecoin from Tether accounts for more than 60% of the market. ARK research indicates that stablecoins backed by Asian currencies will be added to the market.

Recent: US will use stablecoins to ensure dollar hegemony — Scott Bessent

In addition, the digital asset market is undergoing a major shift. “stablecoinization” You can also find out more about the following: “dollarization.” Asian countries like China and Japan sold record-breaking amounts of US Treasurys. Saudi Arabia terminated its 45-year petrodollar contract, while BRICS nations increasingly avoid the SWIFT system to decrease their reliance upon the US dollar. 

BitcoinBTCEtherETH() have traditionally been the principal entry points to the digital asset eco-system. Stablecoins have, however, taken the lead over the past two years, now representing 35%–50% of onchain transaction volumes.

Stablecoins are being adopted by emerging markets despite global regulatory challenges. In Brazil 90% of cryptocurrency transactions take place via stablecoins. They are mostly used to make international purchases.

According to a Visa report, Nigeria, India Indonesia Turkey and Brazil are the top stablecoin markets. Argentina is ranked second for stablecoins. Six out of 10 purchases were also made in Argentina using stablecoins that are pegged to dollars, and USDC/USDT is near parity.

The high rate of inflation in Argentina and the desire to safeguard against a devaluation by the Argentine Peso are driving factors behind this shift. Stablecoins like USDT are used by people in countries that have unstable currencies to protect their wealth. 

Deobanks in High-Risk Areas

Stablecoins paved the path for a whole new generation of financial products. As an example, stablecoins laid the foundations for decentralized blockchain banks or deobanks that adopt stablecoins in their own currency.

Deobanks provide digital banking services and financial products to anyone, regardless of whether they meet the strict criteria for opening a bank account. Deobanks also appeal to people who are not comfortable with traditional banks handling their finances. Non-custodial account holders have complete control over their money and can enjoy full transparency of transactions.

Deobanks, due to its decentralized nature, replaces intermediaries through smart contracts which connect digital wallets with personal bank accounts. This reduces costs and accelerates transactions. Data onchain preserves each transaction in full transparency. This results in a model of finance that is efficient as well as inclusive. 

The future is bright

Analysts forecast the market capitalization of stablecoins will surpass $400 billion in 2025. Deobanks are a key part of this economic expansion, as they use stablecoins in order to boost the economy and increase digital payments networks. These banks open new channels for international commerce, and provide opportunities for financial inclusion. 

Stablecoins, along with next-generation banks on the blockchain will change the world of money and how transactions and transfers are handled. Stablecoins and blockchain will be integrated at the backend. promote lower fees, faster payments and broader access to financial services. This trend signals an evolution away from obsolete systems, and a stronger financial ecosystem.

Opinion by: Maksym Sakharov, co-founder and group CEO of WeFi .

This is a general article and not intended as investment or legal advice. These are solely the opinions, views, and thoughts of the author and may not reflect the opinions and views of Cointelegraph.