Cryptocurrency mogul Mike Novogratz has predicted that stablecoins will be able to replace the foreign exchange (FX) market in less than five years.
Traditional FX markets keep facing such challenges as relatively slow transactions and high costs. Stablecoins could potentially be a game-changer for this sector by making it more efficient.
The Galaxy head has warned that those countries that fail to embrace stablecoins could be potentially left behind, given that he expects the global money system to move toward digital currencies.
“If countries want to participate, they better get on the bandwagon or be left behind,” Novogratz said on the X social media network.
The stablecoin market has experienced tremendous growth over the past several years, growing from a mere $10 billion in 2020 to a whopping $230 billion.
Meanwhile, new players are joining the fray. Last month, Reuters reported that mutual fund giant Fidelity is considering launching its dollar-pegged cryptocurrency.
In December, Ripple launched the RLUSD stablecoin, whose market capitalization is now approaching $300 million.
Tether remains the biggest player on the stablecoin market, with USTD boasting a market cap of $147 billion.
There is significant legislative momentum surrounding stablecoins, with bills known as the STABLE and GENIUS Acts now advancing through Congress.
However, the stablecoin sector still has a reputation problem following the collapse of Terra/Luna in 2022. Last month, Novogratz agreed to pay $200 million in penalties to New York regulators for promoting the failed project.
