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With a market value of about $141 billion, stablecoins have become "too large to ignore," BofA says.
The bank views regulation as the catalyst for the mass adoption of stablecoins and digital assets.
It shares 4 stocks that could benefit as regulation leads more players to the stablecoin industry.
In October, Bank of America's digital asset strategists launched the firm's
crypto research with a report calling the $2.5 trillion industry "too large to ignore." Now, the same words are being used for the $141 billion
stablecoin market.A Stablecoins, which peg their prices to fiat currencies, commodities, or other cryptocurrencies, have become a systemically important asset, but they remain the "wild west," analysts led by Alkesh Shah and Andrew Moss wrote in a November 23 research note.A With quarterly transaction volumes reaching more than $1 trillion this year, stablecoins are widely used by traders and investors to transfer money between exchanges, move money between exchanges and wallets, lock in trading profits, or "rotate into cash" during periods of volatility spikes. They are frequently used as collateral for leveraged digital asset products, the analysts have observed.A The largest stablecoins are pegged to the US dollar. For example, there are more than 72 billion
tether coins (USDT) in circulation, which means over $72 billion is supposed to be held in reserve to ensure that the coins are fully backed and liquid. The same goes for
USDC coins (USDC), which have over 37 billion in circulation.A
