Stablecoins: Transforming Financial Access in Emerging Markets
Stablecoins have revolutionized financial access in emerging markets, serving as crucial tools for millions seeking stability in volatile economies, according to a recent report sponsored by Visa and developed in collaboration with Allium Labs and Castle Island Ventures.
The report, Stablecoins: The Emerging Market Story, revealed that stablecoins have evolved from niche crypto tools into mainstream financial assets, with increased usage in countries like Brazil, India, Indonesia, Nigeria, and Turkey.
Everyday Financial Tool
Initially used for settling transactions in the crypto world, stablecoins have now expanded to meet the everyday financial needs of users in emerging markets. Tether (USDT) has emerged as a trusted digital asset due to network effects and liquidity.
Approximately 47% of survey respondents use stablecoins to hold digital dollars instead of relying on local banking systems, while 43% prefer stablecoins for more efficient currency conversions. The report estimated that stablecoins settled $2.6 trillion in transactions in the first half of 2024.
Safety from Economic Uncertainty
In regions with high inflation or volatile currencies, stablecoins provide a stable alternative to local currencies, allowing users to preserve the value of their savings without depending on traditional banking systems. This inclusionary approach has benefited millions in developing countries.
Stablecoins have bridged the financial gap in countries with limited access to USD-based banking systems, such as Nigeria, enabling efficient value storage, payments, and cross-border transactions.
Growth Expected to Continue
The report highlighted the increasing role of stablecoins in global finance, with 72% of respondents planning to increase their stablecoin usage in the next year. The efficiency and accessibility of stablecoins for cross-border payments and remittances make them a valuable asset, especially in regions with lagging traditional financial systems.
As stablecoin regulation evolves, these digital assets are expected to play a larger role in everyday financial transactions, offering secure and stable financial management solutions for emerging markets.
