Three reasons why stablecoins are booming globally - Will the US follow suit?

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

Although the Trump administration laid a preliminary foundation for the regulation of the cryptocurrency industry in the United States (the new crypto czar from the White House is expected to set the direction in the coming months), these digital assets have already been thriving in emerging markets.

Stablecoins, pegged to fiat currencies, are becoming an important financial tool in many developing countries, facilitating remittances and cross-border trade, bridging gaps in financial inclusion, and providing inflation hedges in countries where traditional banking often falls short and millions are nearly unable to access financial services.

Stablecoins (primarily pegged to the US dollar) have seen 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 cryptocurrency 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-stricken economies such as Argentina and Venezuela, stablecoins provide a dollar-pegged safe haven to avoid local currency depreciation, especially when foreign exchange channels are tightly 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 in decentralized finance in wealthier, more developed economies and serve as a bridge between traditional banking and DeFi, their role is more fundamental yet essential in emerging markets with limited financial infrastructure.

“In low- and middle-income economies with underdeveloped financial systems, they can play a beneficial role by providing citizens and businesses with convenient, extensive, 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, where USDT Tether holds nearly 60% of the market share globally, followed by another dollar-backed asset, USDC.

Stablecoin 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—rather than just leveraging the potential for wealth through Bitcoin.”

Stablecoins are the top priority for the Trump crypto czar

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

In any case, the growth of stablecoins has been nothing short of remarkable. According to data from DelfiLlama, their market capitalization reached an astonishing $100 billion in just the past year, soaring to $225 billion by February 2025. USDT still holds a dominant position, accounting for over 60% of the market share, but challengers—including those backed by financial giants like PayPal—are rising rapidly.

“Stablecoins - the tokenized representation of fiat currencies circulating on the blockchain - are undoubtedly the ‘killer app’ of cryptocurrency,” mentions a report authored by Castle Island Ventures and sponsored by VISA.

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

The report pointed out: “Although they initially emerged as a type of crypto-native collateral and settlement medium for traders and exchanges, they have crossed the chasm and are widely adopted in the global mainstream economy.”

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

Spot cryptocurrency trading volume and the number of monthly addresses sending stablecoins. Source: Castle Island Ventures.

Stablecoins are viewed as a means of value storage, a tool for hedging against inflation, and a vehicle for cross-border transactions, gaining significant traction 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, in some cases accounting for nearly half of all cryptocurrency transactions.

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

Share of regional trading activity: stablecoins and Bitcoin. Source: Chainalysis.

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

“Most of it is for buying things and shopping from abroad,” Gallipolo said, emphasizing that this new trend poses severe regulatory challenges in terms of taxation.

However, Julián Colombo, who leads the local operations of the regional exchange Bitso, stated that in Latin America, no place has stablecoins that are more popular than in Argentina. Given the country’s long-standing inflation and economic instability, 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 US 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 US dollars.”

He said that in Argentina, about two-thirds of the cryptocurrencies purchased through exchanges are done with assets pegged to the US dollar. Although Argentina’s financial indicators have improved under the market-driven government led by pro-crypto President Javier Milei (, the inflation rate remains as high as 84.5%.

Despite the 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 of great significance for Venezuela, a country suffering from prolonged inflation and extensive regulation, making it very complicated to obtain foreign currencies such as the US dollar. In emerging markets with more stable currencies, like Brazil or Mexico, they can play a different but equally important role: enabling 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 have the promise of stability compared to other crypto assets,” the Bank for International Settlements said in a report on stablecoins. “Because of this potential, they are increasingly moving into mainstream finance, and many jurisdictions have developed regulatory approaches for stablecoin issuers pegged to a single fiat currency.”

Stablecoins Driving Remittances in Central America and Africa

One of the most powerful use cases for stablecoins is cross-border payments and remittances, especially in Central America and Africa, where these digital assets provide a cheaper and faster alternative for cross-border money transfers. 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 gained some attention for 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 associated with cross-border transactions through traditional payment channels.”

Speaking about the popularity of stablecoins in remittances, Colombo said, “Before the emergence of cryptocurrencies, remittance services could charge fees of up to 10% just to transfer money from one country to another. With cryptocurrencies, you might have some extra money to send to Mexico, and the transfer could cost just a penny—arriving in minutes instead of hours or days.”

The Cases of Stablecoins for Non-Cryptocurrency Uses Increase

In a report sponsored by Visa, researchers surveyed approximately 500 cryptocurrency users in Nigeria, Indonesia, Turkey, Brazil, and India, totaling 2,541 adults. While acquiring cryptocurrency remains the most popular motivation for using them, non-cryptocurrency purposes such as obtaining dollars, generating profits, or trading 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 self-report the highest level of understanding of stablecoins. Saving in dollars is their top priority.

Zekarias Dubale, co-founder of the Africa 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 necessary to facilitate global trade.

However, stablecoins are not without risks. While the most widely used stablecoins essentially maintain their peg to the strong fiat currencies they are designed 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 supporting them, and instances of stablecoins decoupling occur from time to time, with some even collapsing.

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.