Key Highlights
- Polygon’s Aishwary Gupta predicts a massive “super cycle” with over 100,000 stablecoins emerging within five years.
- He warns that stablecoin yields could pull capital out of banks, pushing them to issue deposit tokens to keep liquidity on-balance-sheet.
- Japan’s use of stablecoins in public finance shows how digital assets can strengthen, not threaten, monetary sovereignty, with future payments becoming seamless across currencies.
A slow but meaningful shift is beginning to reshape the world of digital finance, and Japan, often underestimated in global crypto conversations, may be showing everyone what the next chapter looks like.
While regulators in many countries are still deciding whether stablecoins are a threat, Japan has started using them in places most governments would never experiment: public bonds, subsidies, and even economic stimulus.
This is the environment in which Aishwary Gupta, Global Head of Payments & RWA at Polygon, sees the outlines of a much larger movement starting to take shape.
Speaking to The Fintech Times, Gupta said the world is entering what he calls a stablecoin “super cycle”—a wave of adoption that could leave the global financial system looking very different in just a few years.
Japan’s use of stablecoins points to a different kind of future
Japan’s quiet experimentation with assets like JPYC, a yen-pegged digital stablecoin, is important because it reframes the debate. Rather than treating stablecoins as an attack on central banks, Japan is using them as new tools to extend the reach of the yen.
That is exactly the point Gupta has been trying to make. According to him, the fear of regulators is misplaced.
“It’s not about the government losing control,” he said. “It’s more like giving more power to any country’s currency… if you look at the US economy, the demand for the petrodollar was reducing, and then stablecoins came in and suddenly everyone wanted US dollars because they had access to it.”
In his view, stablecoins do not float freely outside policy frameworks; they respond to interest rates and other economic signals just like regular currencies. They may run on new infrastructure, but they still sit inside the government’s economic universe.
A coming flood of stablecoins
Gupta believes the world is on the edge of an astonishing expansion. “I think in five years my projection is that there are going to be a hundred thousand stablecoins at least.”
That number would be unimaginable today, but his argument is that every major institution—banks, corporations, fintechs, even large technology companies—will want their own digital representation of value. Some will use them for payments, others for loyalty systems, trading, or internal settlement. Many will never be household names, but they will exist and circulate within their ecosystems.
This explosion could be deeply uncomfortable for banks. For decades, banks have depended on cheap deposits to support lending. CASA balances have always been the fuel that allows banks to create credit. But stablecoins offering attractive on-chain yields are pulling that liquidity away.
“The capital will flow out of the banks which means this reduces the capability of a bank to actually create credit because effectively the money in the bank helps them to create credit and it also kind of increases their cost of capital,” Gupta said.
If that trend accelerates, the entire banking model will have to shift.
Banks prepare their countermove: Deposit tokens
One of the clearest responses from the banking world is the growing interest in deposit tokens. These are digital twins of bank deposits—fully backed, remaining on a bank’s balance sheet, but usable in the same way stablecoins are used on-chain.
Gupta points to JP Morgan’s early steps in this area. He describes a scenario in which a wealthy individual holds a deposit token—say, JPMD—and uses it to trade on a major exchange like Coinbase without ever pulling the underlying money out of JP Morgan’s custody.
From the bank’s point of view, this solves a huge problem: deposits stay put. But customers get the mobility and speed of blockchain rails. It is a way for banks to enter the digital era without watching their core funding walk out the door.
Making sense of a world with 100,000 stablecoins
Of course, if the industry really ends up with tens of thousands of tokens, the experience could become chaotic. No consumer wants to think about which digital asset they are paying with at a checkout counter. Gupta expects this complexity to disappear behind settlement layers—invisible infrastructure that handles conversions instantly.
He compares the future payment system to a sort of digital mesh, where someone might pay a merchant with JPMD while the merchant receives USDC or another currency entirely. The switch would happen out of sight, much the way card networks handle foreign currency transactions today.
Consumers would not track individual stablecoins any more than they track which rails their credit cards run on.
A financial system on the edge of reinvention
Gupta’s forecast may seem ambitious, but many of the signs are already visible: governments testing blockchain-based payments, large banks building tokenization divisions, and stablecoin volumes growing even during market downturns.
If his super cycle materializes, stablecoins will not just be another crypto product—they will become a standard layer of the global financial system. Banks will issue their own tokens, governments will design new digital channels for public funds, and users will transact across currencies without thinking about the underlying rails.
The hard part, Gupta suggests, is not whether this transformation happens. It is whether traditional institutions can adapt quickly enough to remain relevant in a world where money itself becomes programmable.
Also Read: RBI Takes Cautious Stance on Crypto and Stablecoins, Says Governor
