Polygon is projecting an avalanche of stablecoins that will pressure traditional banking.

Source: CritpoTendencia Original Title: Polygon is projecting an avalanche of stablecoins that will pressure traditional banking Original Link: The crypto ecosystem could be on the brink of a paradigm shift. According to projections from executives at Polygon, the sector is heading towards a supercycle driven by the massive expansion of stablecoins.

Aishwary Gupta, global head of Payments and RWA at the company, estimates that in the next five years there could be up to 100,000 issuers, a leap that would completely transform the digital financial infrastructure.

If this scenario materializes, traditional banking would be forced to accelerate its digitalization and rethink its capital raising model, as the competitive pressure from digital assets would become increasingly evident.

The leap of stablecoins towards mass adoption

The analysis starts from the idea that stablecoins are ceasing to be a marginal product and are becoming the preferred instrument for global payments, instant transfers, and digital value reserves.

In a recent interview, Gupta pointed out that the next phase of growth will not come solely from banks and fintechs, but also from large tech companies, governments, and traditional institutions, which will drive the issuance of stablecoins backed by various assets and currencies.

As this trend accelerates, Polygon estimates that the foundations of the payment system could be completely transformed. The ability to execute cross-border transactions at any time, access immediate liquidity, and significantly reduce costs associated with banking intermediation would give stablecoins a central role in the global financial infrastructure.

In this scenario, they would go from being tools of the crypto ecosystem to becoming an essential component of the modern economic system.

The banking challenge in the face of the rise of stablecoins

The potential emergence of tens of thousands of stablecoins represents a direct challenge to traditional banking. According to Gupta, this shift could lead to a gradual migration of deposits towards more efficient and liquid digital currencies.

If that capital flight accelerates, banks would see their funding base reduced. This would limit their ability to grant credit and weaken their role as financial intermediaries.

In this context, many entities may choose to issue their own digital assets backed by deposits, known as deposit tokens.

These tokens would allow for retaining liquidity within the banking system while simultaneously offering on-chain payments and blockchain-based services without leaving the regulated perimeter.

Opportunities, risks and the new regulatory paradigm

The multiplication of stablecoins will not only drive competition and disruption, but it will also bring regulatory, operational, and trust challenges. As thousands of issuers emerge, the risk of market fragmentation will increase, and it will be essential to have stronger compliance controls, as well as clear guarantees of liquidity and backing.

Moreover, Polygon warns that the success of the so-called supercycle will depend on the joint ability of the industry and regulators to establish global standards.

This implies avoiding regulatory arbitrage between jurisdictions and designing hybrid models in which private stablecoins and central bank digital currencies can coexist without compromising financial stability.

If that balance is achieved, the massive expansion of stablecoins could give rise to a more efficient, transparent, and globally accessible financial infrastructure.