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Stablecoins grow 450% to $156B in 2021: Fitch

Although regulations risk deterred institutions, higher certainty could create opportunities, agency says

Stablecoins, digital coins whose price is stabilized to a traditional currency, grew around 450% to approximately $156 billion in 2021 from 2020, Fitch Ratings said Tuesday.

The eight largest stablecoins had a total market value of $152 billion as of Dec. 13, accounting for around 98% of their total market capitalization, said the global rating agency.

Although the most widely used stablecoin,Tether, saw its market share decline, eight stablecoins now have market values of at least $1 billion each, it said.

Tether remains the largest stablecoin with a market capitalization of $76.6 billion as of Dec. 13, followed by USDCoin at $41.6 billion, it added.

Stablecoins became a hot topic in Congress earlier this month as US lawmakers eye new regulations.

Fitch said although the risk of regulations has deterred financial institutions from engaging with stablecoin operators, higher certainty about the regulatory status of stablecoins and their issuers could create market opportunities.

“Clearer and tighter regulation could clarify how far the credit profiles of stablecoin issuers diverge from traditional developed-market participants in the deposit-taking space, but short records will weigh on their creditworthiness,” it said in a statement.

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