Stablecoins are playing a crucial role in simplifying trading between fiat currencies and cryptocurrencies, with the stablecoin market currently valued at US$128 billion. The institutional interest in digital assets has been fueled by the stablecoin market, with companies like Société Générale and Visa announcing their plans to introduce stablecoins.
While stablecoins are designed to be less volatile than other cryptocurrencies, they are not completely immune to market fluctuations and can still experience price volatility. Deposit tokens are now being considered as a more stable and reliable digital asset, with JPMorgan releasing research indicating that they could overtake stablecoins in popularity. However, despite the risks that traditional markets carry, some institutions are still choosing stablecoins over deposit tokens.