How stablecoins are setting the standard for RWA’s success

The rise of stablecoins has been a game-changer for the blockchain world over the past few years. Anchored to currencies like the US dollar, stablecoins such as USDC have found product-market fit as a secure and programmable digital money for payments and financial applications.

Data from RWA.xyz shows that the total stablecoin supply surged from just $4 billion at the start of 2020 to over $156 billion by 2024 — a 3800% growth in merely four years.

Much of this was driven by the utility of stablecoins in facilitating fast, affordable, and borderless financial transactions.

This market fit, however, represents just the beginning for real-world assets (RWAs) on blockchains.

As the infrastructure and regulatory landscape continues to mature, we believe other asset classes like stocks, bonds, and commodities are likely to follow the trail forged by stablecoins.

In this article, we’ll take a close look at why stablecoins’ success could pave the way for the growth of other RWAs on the blockchain and how Swarm’s is poised to drive them further.

Summary:

• Crypto payments
• The perfect market-fit
• Next steps
• Swarm’s role

Crypto payments

Blockchain-based payments have gone from academic experiment to legitimately usable at scale, evolving into a compelling alternative to legacy payment rails.

While the original Bitcoin whitepaper conceptualized digital payments, it took us over a decade of infrastructure buildout and key technological improvements to make this use case a reality.

We can say now, stablecoins stood up to the primitive essence of cryptocurrencies — a reliable, fast, and transparent way of transferring money.

In May alone, dollar-pegged stablecoins achieved an impressive transaction volume of approximately $330 billion, according to Visa. To put this into perspective, on an annualized basis, this translates to around $3.9 trillion in transactions, which is roughly Germany’s GDP!

The perfect market-fit

The key innovation of stablecoins was taking something as fundamental as fiat currency and making it compatible with blockchain networks. They have opened the door to leveraging crypto rails for money transfer while retaining stability and security.

Compared to traditional payment systems built on antiquated financial systems, they provide an exponential leap in speed and efficiency:

• Transactions are settled in seconds rather than days.
• They enable low-cost, value transfer across borders with no need for intermediaries like correspondent banks.

Critically, their open nature and programmability allow them to be seamlessly integrated into new decentralized applications, automated workflows and revenue streams.

Furthermore, while the idea of decentralized finance has generated excitement, the reality is that most DeFi applications have struggled to gain meaningful traction outside of a niche user base.

In the scenario of hype cycles and uneven progress across DeFi, tokens like USDC, USDT and DAI have emerged as established success stories. These tokens found widespread adoption by powering every aspect of the ecosystem.

Today, they aren’t just a critical base layer, they are arguably the only thing in DeFi that genuinely works and drives tangible economic activity.

Next steps

If stablecoins were the pioneer in bringing real-world value onto blockchains, the next step lies in tokenizing other asset classes and markets.

The significant growth we’ve seen in stablecoin adoption was highly underscored by the fact that holders of such assets haven’t been able to earn yield on top of them.

New tokenized assets are simply the natural solution.

As seen in previous articles, tokenizing public assets like stocks, bonds, and commodities will unlock new revenue streams, reduce costs, and streamline financial operations, among other benefits.

With it, investors can:

• Have access to high quality assets all around the world
• Trade at will on round-the-clock hours
• Diversify their portfolio while remaining on-chain

And many more!

Swarm’s role

Stablecoins proved that blockchain networks could support massive, liquid markets for digitized assets tied to real-world value.

While new asset types may be introduced, we believe stablecoins infrastructure, learnings around regulation, and composability could set the stage for the next big wave of tokenized assets.

It is important to note that we are still in the early stages of this narrative as traditional institutions have just begun to explore and implement blockchain technology.

Widespread adoption still has a long way to go, but it is undoubtedly true that these innovations have the potential to disrupt the traditional financial system and create a more transparent and efficient economic model.

And you won’t want to be left out of this next wave.

What better place to start experiencing them but Swarm? Here, we are building the infrastructure necessary to integrate real-world assets into blockchain.

Users can have on-chain access to tokenized stocks and bonds, benefiting from 24/7 risk management, flexibility and cross-border trading opportunities

We know how to tokenize assets:

• Web3 self-custody and protocol transparency
• Real-time asset verification
• Fully asset backed tokens
• Redemption linked to markets

About $SMT

• You can buy and exchange $SMT on Uniswap (Ethereum and Polygon), MEXC, Gate.io, (under the ticker $SMTX,), BingX, Bitstamp, the Swarm platform and Open dOTC.
• For tokenomics and distribution, visit the $SMT docs page.
• Visit CoinGecko for up-to-date $SMT stats and figures.
• Join the conversation on X and Telegram.
• For total circulating supply figures, use our API.