Uniswap (UNI) and Spark are betting that as the number of stablecoins grow, the market will need the equivalent of a foreign-exchange network to move liquidity between issuers.
Spark, a decentralized-finance (DeFi) protocol focused on stablecoin liquidity, said Thursday it is working with decentralized exchange Uniswap to create what it calls an “FX layer” for stablecoins, a shared liquidity network designed to support a growing number of issuers.
The goal is to make it easier to move between stablecoins while allowing idle capital to earn yield until it’s needed for trading, the companies said.
The move comes as stablecoins move beyond their crypto-native roots and increasingly become part of the cross-border payment network. That’s been helped by lawmakers in the U.S. and elsewhere advancing regulatory frameworks encouraging fintechs, payment firms and banks to enter the market. The stablecoin market could grow from the current $300 billion to $4 trillion by 2030, global bank Citi projected.
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