Global Stablecoins Entering a 'Super Cycle,' Says Polygon Executive

According to Odaily, Aishwary Gupta, the Global Head of Payments and RWA at Polygon, believes that stablecoins worldwide are entering a 'super cycle.' He predicts that within the next five years, the number of stablecoin issuers could exceed 100,000. Gupta highlighted Japan's involvement in government bond and policy stimulus pilots using stablecoins like JPYC, demonstrating that stablecoins can serve as tools for national economic sovereignty rather than undermining central bank authority. He noted that stablecoins, like fiat currencies, are influenced by monetary policy and can enhance global demand for a country's currency, similar to how stablecoins have increased the use of the U.S. dollar. However, Gupta warned that the attractive yields of stablecoins are drawing low-interest deposits from the banking system to the blockchain, potentially weakening banks' ability to create credit and maintain low-cost capital. To address this competition, he anticipates that banks will issue 'deposit tokens' on a large scale to retain funds on their balance sheets while allowing customers to use assets on the blockchain. He also suggested that as the number of stablecoins rapidly expands, future payment systems will rely on a unified settlement layer. This would enable users to pay with any token and merchants to receive payments in another token, with the underlying conversion happening seamlessly in the background.