Stablecoins Threaten Legacy Platforms, $250B Market Grows

Legacy foreign exchange and payments platforms are actively opposing the adoption of stablecoins, viewing them as a significant threat to their traditional business models. Kevin O’Leary, a well-known investor, highlighted this during his keynote address at Consensus 2025. He pointed out that these platforms typically charge high fees for cross-border transactions, and the introduction of regulated stablecoins could make these services more efficient, transparent, and cost-effective.

O’Leary described the global currency trading market as a multi-trillion dollar industry that is outdated and inefficient. He emphasized that the biggest challenge to this established system is the potential approval of regulated stablecoins. Once approved, stablecoins could transform the market by making it more efficient and less costly for users.

O’Leary also noted that US lawmakers are working on legislation that could accelerate the global adoption of stablecoins. The proposed Genius Act, a framework for regulating stablecoins, is expected to be passed before the end of May. O’Leary predicted that once the US Securities and Exchange Commission (SEC) approves this act, other regulators in countries like Abu Dhabi, Switzerland, and England will follow suit. He added that the financial services industry is actively working to prevent this legislation from being enacted, as it views stablecoins as a threat to their revenue streams.

O’Leary further suggested that regulatory clarity for stablecoins could pave the way for broader cryptocurrency reforms. This could potentially unlock trillions of dollars in institutional capital. US Senator Kirsten Gillibrand echoed this sentiment, stating that the upcoming stablecoin legislation will include significant progress on consumer protection, bankruptcy protection, and ethics.

As of May 15, stablecoins collectively hold a market capitalization of nearly $250 billion. Tether’s USDT, a US-dollar pegged stablecoin, leads the market with a capitalization of around $150 million, followed by Circle’s USDC, another US-dollar pegged stablecoin with a market cap of over $60 billion. These figures underscore the growing importance of stablecoins in the financial landscape.