S&P Global Gives Positive Outlook To European Stablecoin Market

S&P Global sees the European stablecoin market booming.

The global ratings organisation recently published an outlook of how stablecoins will be managed by European banking institutions. Perhaps its prediction that its market grows from anywhere between 25B and 1.1T in 5 years is the biggest signal of the tides turning to date.

S&P mentions that the Qivalis project is set to grow from its current 11 participants to many more and ties it clearly to the "deposit-to-stablecoin swap" function after stablecoins are purchased from a licensed CASP (Crypto-Asset Service Provider) entity under the Mica framework.

The report does touch on some risks considered by the ECB (European Central Bank) on more policy and regulatory suggestions, specifically on the composition of the reserve of stablecoins by issuers and multi-issuer redemption capacity.

Unlike in GENIUS Act, it stresses that under MiCA issuers have to spread their reserve assets more selectively (not exceeding 5-25% under one custodian) depending on the institution and can lead to reclassifications, as well as ability to redeem outside of EU.

However, the narrative does shift back to a more positive note.

The authors place tokenisation as a large driving force for stablecoin transfers and global adoption. Tokenising assets of every kind, submitting collateral and payments for businesses, alongside with treasuries being modernised all lead to a higher transaction and volume of stablecoins.

Other fun predictions:

> Euro-backed stablecoins reach €500B alone from tokenisation markets

> Euro-backed stablecoins reach €100B from payments within tokenisation

> Overall market likely to be 2.2% of Eurozone deposits by 2030

> Stablecoins become just one settlement layer, together with wCBDCs and tokenised deposits