Three Reasons Why Stablecoins Are Thriving Globally — Will the US Follow?

Author: David Feliba, CoinTelegraph; Translated by: Bai Shui, Golden Finance

Although the Trump administration laid the initial groundwork for the regulation of the U.S. cryptocurrency industry (with the expectation that the White House's new crypto czar will set the direction in the coming months), these digital assets have already been thriving in emerging markets.

Stablecoins, pegged to fiat currencies, are becoming important financial tools for many developing countries, facilitating remittances and cross-border trade, bridging the gap in financial inclusion, and providing inflation hedging in countries where traditional banking services are often insufficient and millions are nearly unable to access financial services.

Stablecoins (primarily pegged to the US dollar) have experienced explosive growth in recent years, with their actual use cases rapidly expanding to Africa, Latin America, and some developing countries in Asia. While the United States is still exploring how to apply this technology beyond the crypto space, emerging markets have already demonstrated the importance of stablecoins.

In these regions, they are not just a financial experiment, but a solution.

Stablecoins as a Hedge Against Inflation in South America

In inflation-ridden economies like Argentina and Venezuela, stablecoins provide a dollar-pegged safe haven to avoid local currency devaluation, especially when foreign exchange channels are strictly controlled. Across Africa and Central America, they serve as a cost-effective remittance and cross-border payment tool, while in places like Indonesia, they offer an alternative that is more accessible than traditional dollar banking, which may involve complex requirements.

Eswar Prasad, a professor of trade policy at Cornell University, stated that while stablecoins are primarily used for decentralized finance in wealthier and more developed economies, serving as a bridge between traditional banking and DeFi, their role is more fundamental yet essential in emerging markets with limited financial infrastructure.

"In underdeveloped financial systems of lower-middle-income economies, they can play a beneficial role by providing citizens and businesses with convenient, widespread, and low-cost digital payment systems."

The US dollar is widely regarded as a global store of value, and acquiring US dollars is a key driver for emerging markets to adopt stablecoins. Compared to the volatility of early cryptocurrencies like Bitcoin, stablecoins are designed to provide stability, with most stablecoins pegged to the US dollar, of which USDT Tether holds nearly 60% of the global market share, followed by another dollar-backed asset, USDC.

Stablecoins provided by the issuer. Source: Castle Island Ventures.

"Some problems in the world need to be solved with a cryptocurrency that does not constantly fluctuate in price," said Julián Colombo, a senior executive at the Mexican cryptocurrency exchange Bitso, in an interview. Bitso has official offices in Argentina, Brazil, and Colombia.

"Stablecoins provide a way to bring all the benefits of cryptocurrency into real-world use cases—not just the potential to get rich off Bitcoin."

Stablecoins are Trump's top priority as the crypto czar.

As momentum around stablecoins grows in the U.S., two-party senators introduced legislation on February 4 to establish a regulatory framework. White House artificial intelligence and cryptocurrency czar David Sacks (David Sacks) emphasized during his first address to the industry that stablecoin regulation is a top priority for the government. The task force led by the former venture capitalist will draft key policies over the next six months.

Regardless, the growth of stablecoins is nothing short of astonishing. According to data from DelfiLlama, their market capitalization reached an incredible $100 billion in just the past year, skyrocketing to $225 billion by February 2025. USDT still dominates, holding over 60% of the market share, but challengers—including those backed by financial giants like PayPal—are rapidly rising.

"Stablecoins - the tokenized representation of fiat currency circulating on the blockchain - are undoubtedly the 'killer application' of cryptocurrency," mentioned a report written by Castle Island Ventures and sponsored by VISA.

"We believe that stablecoins represent a payment innovation that has the potential to provide secure, reliable, and convenient payment services to more people in more places," said Cuy Sheffield, global cryptocurrency director of the American payment giant.

The report states: "Although they initially emerged as a type of native collateral and settlement medium for traders and exchanges, they have crossed the chasm and are widely adopted in the global ordinary economy."

"Given the differences between stablecoin activity and the cycles of the cryptocurrency market, it is clear that the adoption of stablecoins has gone beyond merely serving cryptocurrency users and trading use cases."

Spot cryptocurrency trading volume and monthly addresses sent by stablecoins. Data source: Castle Island Ventures.

Stablecoins are viewed as a means of value storage, a tool for hedging against inflation, and a medium for cross-border transactions, gaining significant appeal in emerging markets. A recent report by Chainalysis found that in regions such as Africa, Eastern Europe, Latin America, and Asia, the adoption rate of stablecoins far exceeds that of Bitcoin, accounting for nearly half of all cryptocurrency transactions in some cases.

In comparison, the adoption rate of stablecoins in the United States and North America is the lowest, although it still holds a considerable share.

Share of Regional Trading Activities: Stablecoins and Bitcoin. Source: Chainalysis.

Gabriel Galipodo, the president of the Central Bank of Brazil, stated that the usage of stablecoins has significantly increased in recent years in Brazil and other regions. Brazil is a strong nation in Latin America, with a population of 216 million and a GDP of $2.2 trillion. This economist mentioned at an event of the Bank for International Settlements in Mexico City on February 6 that as much as 90% of the total cryptocurrency circulation is related to stablecoins.

"Most of it is about buying things and shopping from abroad," Galipolou said, emphasizing that this new trend has brought significant regulatory challenges in terms of taxation.

However, Julián Colombo, who leads the local operations of the regional exchange Bitso, stated that there is no place in Latin America where stablecoins are more popular than in Argentina. In the context of long-term inflation and economic instability in the country, they provide an important financial refuge for citizens.

Colombo stated: "In Argentina, as in other high-inflation countries, stablecoins have become a solution to a very real and urgent problem."

"Argentinians do not trust the local currency and prefer to save in dollars, but the foreign exchange controls and restrictions imposed by the government make it difficult to obtain dollars. Stablecoins fill this gap, providing a way to hold and trade in dollars."

He said that in Argentina, about two-thirds of the cryptocurrencies purchased through exchanges are conducted with assets pegged to the dollar. Although Argentina's financial indicators have improved under the market-driven government of pro-crypto President Javier Milei (, the inflation rate still stands at 84.5%.

Despite recent monthly data showing a downward trend, rebuilding trust in the local currency in a country long plagued by triple-digit inflation and severe currency devaluation takes time to ensure sustained demand for stablecoins pegged to the dollar.

Similarly, the adoption of such digital assets is significant for Venezuela, a country suffering from long-term inflation and extensive regulation, making it very complicated to obtain foreign currencies like the US dollar. In emerging markets with more stable currencies, such as Brazil or Mexico, they can play a different but equally important role: facilitating fast, low-cost remittances without the volatility associated with traditional cryptocurrencies.

Companies use them to pay for international service fees, hire remote employees, send dividends, and facilitate remittances, making cross-border transactions more efficient and convenient.

"Stablecoins offer a promise of stability compared to other crypto assets," the Bank for International Settlements stated in a report on stablecoins. "Due to this potential, they are increasingly entering mainstream finance, and many jurisdictions have already developed regulatory approaches for stablecoin issuers pegged to a single fiat currency."

Stablecoins Drive Remittances in Central America and Africa

One of the most powerful use cases for stablecoins is cross-border transfers and remittances, especially in Central America and Africa, where these digital assets provide a cheaper and faster alternative for cross-border capital flows. Immigrants working in the United States often find stablecoins to be a more convenient tool for sending money back to their families at home.

"Stablecoins have received some attention in domestic and cross-border payments," said Prasad, a professor of trade policy at Cornell University in the U.S., to Cointelegraph. "They have played a particularly useful role in overcoming the inefficiencies, high costs, and slow processing times of cross-border transactions conducted through traditional payment channels."

When it comes to the popularity of stablecoins in remittances, Colombo said, "Before the advent of cryptocurrencies, remittance services could charge fees of up to 10% just to transfer money from one country to another. By using cryptocurrencies, you might have a little extra money to send to Mexico, and the transfer might only cost a penny—arriving in just a few minutes instead of hours or days."

The Increase of Stablecoin Use Cases Beyond Cryptocurrencies

In a report sponsored by Visa, researchers surveyed around 500 cryptocurrency users in Nigeria, Indonesia, Turkey, Brazil, and India, totaling 2,541 adults. While acquiring cryptocurrency remains the most popular motivation for using it, non-cryptocurrency uses such as acquiring dollars, generating profits, or for trading purposes are also very popular.

![Z4BsxtyMxUbe8QIchEQhyRE88sS4LVw8txd6yG3m.jpeg])https://img.jinse.cn/7350106_watermarknone.png "7350106"(

Stablecoin Survey Results. Source: Castle Island Ventures.

Surveys show that compared to other surveyed countries, Nigerian users have the strongest affinity for stablecoins. Nigerians trade with stablecoins most frequently, have the largest share of stablecoins in their portfolios, use them for the widest range of non-crypto purposes, and report the highest level of understanding of stablecoins. Saving in dollars is their top priority.

Zekarias Dubale, co-founder of the African Fintech Summit, stated that stablecoins have become the "holy grail" for cross-border trade, international remittances, and value transfer across the entire African continent. He believes that these digital assets can provide the financial infrastructure needed to facilitate global trade.

However, stablecoins are not without risks. Although the most widely used stablecoins essentially maintain their peg to the strong fiat currencies they aim to reflect, the market is rapidly expanding, with hundreds of digital assets currently in circulation. However, many of these assets lack transparency regarding the reserves that support them, and instances of stablecoins decoupling do occur, sometimes even leading to collapse.

Nevertheless, under the leadership of the Trump administration, the development momentum of stablecoins in the United States and emerging markets has been strong, proving to be a powerful tool to help citizens overcome challenges related to financial inclusion and underdeveloped infrastructure.