A new report suggests that stablecoins have evolved from a niche digital asset to a fundamental component of the new financial architecture, bridging the gap between traditional and decentralised finance. The study, titled ‘The Impact of Stablecoins’, was jointly published by IFI Global and Jersey Finance, highlighting the potential for stablecoins to revolutionise the private markets.
The report explores the rapid ascent of stablecoins, their crucial role in the digitalisation of asset management, and the significant opportunities they offer for liquidity and operational efficiency for fund managers and institutions.
The $300 Billion Milestone
The study points to accelerated growth in the stablecoin market over the past year, with its total market capitalisation surpassing US$300 billion in October 2025. This growth has outpaced that of many traditional asset classes, signalling a significant shift in the financial landscape.
This expansion is largely attributed to increasing adoption by institutional investors, cementing stablecoins as an established part of the investment industry, particularly within private markets.
Institutional Investors Lead The Charge
According to the report, a key driver of this growth is the institutional appetite for digital assets. A survey conducted for the report found that 70% of UK and US private fund managers were considering incorporating stablecoins into their operational development.
While none of the surveyed managers were at the implementation stage, the high level of interest indicates a clear trend towards integrating these digital assets into fund operations to leverage their benefits. Key advantages identified for private funds include enhanced liquidity, the potential for fractional ownership through tokenisation, improved investor accessibility, and faster cross-border interoperability.
Simon Osborn, Editor of IFI Global and author of the report, commented, “Institutional investors are the key force behind stablecoin growth, with their positive impact on private market liquidity widely recognised among managers. Yet, while the potential of stablecoins is clear, so too are the challenges – from upgrading technical infrastructure, to choosing forward-looking jurisdictions with robust and transparent regulatory frameworks.”
Navigating Regulatory and Operational Hurdles
Despite the clear momentum, the report acknowledges that challenges remain. Emerging regulatory frameworks across the globe signal a move towards recognising stablecoins as an integral part of the financial system, but the regulatory treatment still varies significantly between jurisdictions.
Furthermore, integrating stablecoins into existing operational systems presents a considerable challenge for managers. The necessary shifts in areas like cash and treasury management could be both time-consuming and expensive.
Elliot Refson, Head of Funds at Jersey Finance, noted, “Despite major legislative initiatives in key markets, challenges at both a regulatory and an operational level remain. This report takes a detailed look at the emerging landscape and highlights how IFCs such as Jersey can play a crucial role, both in supporting managers and in providing the right ecosystem as stablecoins move centre stage.”
Relevance for MENA
While the report focuses on UK and US managers, its findings are highly relevant for the MENA region’s rapidly evolving fintech and digital asset landscape. Jurisdictions like the UAE have established dedicated regulatory bodies such as the Virtual Assets Regulatory Authority (VARA) in Dubai, creating a clear framework for digital asset growth.
For MENA-based VCs, family offices, and fund managers, stablecoins offer a powerful tool to enhance cross-border investments, provide liquidity in traditionally illiquid assets like real estate, and streamline settlement processes. As regional hubs like Riyadh and Abu Dhabi compete to attract global financial talent and technology, the adoption and regulation of stablecoins will be a critical factor in shaping the future of finance in the Middle East.
About Jersey Finance
Jersey Finance represents and promotes the Island of Jersey as a leading international finance centre (IFC). For over 60 years, Jersey has been at the forefront of banking, corporate services, fintech, and funds. The organisation champions Jersey’s competitive position, supporting high regulatory standards and attractive products and services to meet the needs of global investors.
Source: Zawya
