- Stablecoin use has surged in emerging markets, now handling over $2.6 trillion in value in the first half of 2024 alone
- The majority of stablecoin users in emerging markets prefer them for dollar-denominated savings, cross-border payments, and business transactions
- Countries like Nigeria, India, and Turkey are seeing the highest rates of stablecoin usage, with a growing number of users adopting them as an alternative to traditional banking
Stablecoins are revolutionizing financial systems across emerging markets, providing a lifeline where traditional banking falls short, according to a new report. The Visa-funded study found that a staggering $2.6 trillion worth of transactions settled through stablecoins in just the first six months of 2024, representing a significant shift in how people in these regions interact with money. The study, Stablecoins: The Emerging Market Story, found that these users are increasingly turning to digital currencies for their financial needs over fiat currencies.
Dollarization in Emerging Markets
The report begins with Visa’s Head of Crypto, Cuy Sheffield, outlining the company’s stance on cryptocurrencies:
We believe stablecoins represent a payment innovation that has the potential to expand access to secure, reliable, and convenient payments to more people in more places.
The report states that users are being drawn to stablecoins for reasons beyond crypto trading, with many relying on stablecoins as a means to save money in US dollars, access better currency conversion rates, and even earn yields through decentralized finance platforms.
In Nigeria, for example, 64% of respondents cited savings in dollars as a primary goal for using stablecoins, a common theme across many other emerging economies, as they provide much-needed financial security in the face of local currency volatility.
The rise of stablecoins has led to what the report refers to the “dollarization” of the blockchain, where stablecoins pegged to the US dollar are providing access to hard currency in places where dollar banking is either restricted or non-existent. “Stablecoins are particularly appealing when dollar banking is non-existent or hard to access,” notes the report, highlighting their utility in countries experiencing inflation and financial instability.
The Shift Toward Non-Trading Uses
The report also found that the majority of stablecoin users in emerging markets are no longer limited to crypto trading. In Brazil, India, Indonesia, Nigeria, and Turkey, non-crypto uses—such as remittances, cross-border payments, and business transactions—are becoming increasingly common. “In some markets, stablecoins are being adopted for payroll, trade settlement, and remittances, offering an alternative to unreliable or costly banking systems,” the report states.
With 57% of users reporting an increase in stablecoin usage over the past year and 72% anticipating further growth, it’s clear that this digital currency revolution is just beginning. As more businesses and individuals in emerging markets adopt stablecoins for everyday transactions, their role in the global economy is set to expand even further.
To this point, the report concludes, “We believe stablecoins represent a payment innovation that has the potential to expand access to secure, reliable, and convenient payments to more people in more places.”
