Author: David Feliba, CoinTelegraph; Translated by: Bai Shui, Jinse Caijing
Although the Trump administration laid the initial groundwork for the regulation of the U.S. crypto industry (with the expectation that the White House’s new crypto czar will set the direction in the coming months), these digital assets are already thriving in emerging markets.
Stablecoins are pegged to fiat currencies and are becoming an important financial tool 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 often falls short 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 significance 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 like Argentina and Venezuela, stablecoins provide a dollar-pegged safe haven to avoid local currency depreciation, especially in situations where foreign exchange channels are tightly controlled. Across Africa and Central America, they serve as an economically efficient remittance and cross-border payment tool, while in places like Indonesia, they can 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 and serve as a bridge between traditional banking and DeFi in wealthier, more developed economies, their role is more fundamental yet essential in emerging markets with limited financial infrastructure.
“In underdeveloped financial systems of low to middle-income economies, they can play a beneficial role by providing citizens and businesses with convenient, widespread, low-cost digital payment systems.”
The US dollar is widely regarded as a global store of value, and access to the dollar 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 accounts for nearly 60% of the global market, followed by another dollar-backed asset, USDC.
Stablecoin provided by the issuer. Source: Castle Island Ventures.
“There are problems in the world that need to be solved with a cryptocurrency whose prices don’t fluctuate constantly,” Julián Colombo, a senior executive at Bitso, a Mexican cryptocurrency exchange with official offices in Argentina, Brazil and Colombia, said in an interview.
“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 Trump’s crypto czar.
As bipartisan senators introduced legislation on February 4 to establish a regulatory framework, momentum around stablecoins in the U.S. is growing. White House artificial intelligence and cryptocurrency czar David Sacks ( emphasized that stablecoin regulation is a top priority for the government in his first address to the industry. The working group 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 impressive $100 billion in just the past year, and by February 2025, the total market cap soared to $225 billion. USDT still dominates, holding 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 currency circulating on the blockchain - are undoubtedly the ‘killer application’ of cryptocurrencies,” mentioned in a report written by Castle Island Ventures and sponsored by VISA.
“We believe that stablecoins represent a payment innovation that could enable more people in more places to access secure, reliable, and convenient payment services,” said Cuy Sheffield, the global cryptocurrency lead at this American payment giant.
The report points out: “Although they initially emerged as a type of crypto-native collateral and settlement medium for traders and exchanges, they have bridged the gap and are widely adopted in the global mainstream economy.”
“Based on the differences between stablecoin activity and cryptocurrency market cycles, it is clear that the adoption of stablecoins has gone beyond merely serving cryptocurrency users and trading use cases.”
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Spot cryptocurrency trading volume and monthly addresses for stablecoin transfers. Source: Castle Island Ventures.
Stablecoins are seen as a store of value, a tool for hedging inflation, and a means for cross-border transactions, gaining significant appeal in emerging markets. A recent report by Chainalysis found that the adoption rate of stablecoins in regions such as Africa, Eastern Europe, Latin America, and Asia far exceeds that of Bitcoin, accounting for nearly half of all cryptocurrency transactions in some cases.
In contrast, the adoption rate of stablecoins in the United States and North America is the lowest, although it still holds a considerable share.
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Regional trading activity share: 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 places. Brazil is a strong nation in Latin America, with a population of 216 million and a GDP of $2.2 trillion. The economist mentioned at an event by 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 for buying things and shopping from abroad,” Galipolo 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 in Latin America, no place is more popular for stablecoins than 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, just like 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 implemented by the government make it difficult to obtain dollars. Stablecoins fill this gap by 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 dollar. Despite improvements in Argentina’s financial indicators under the market-driven government led by pro-crypto President Javier Milei )Javier Milei(, the inflation rate remains as high as 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 US dollar.
Similarly, the adoption of such digital assets is significant for Venezuela, a country suffering from long-term inflation and extensive regulation, making access to foreign currencies like the US dollar very complicated. In emerging markets with more stable currencies, such as 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 promise 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 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 remitting money to their families back home.
“Stablecoins have garnered some attention in domestic and cross-border payments,” said Prasad, a professor of trade policy at Cornell University in the United States, to Cointelegraph. “They have played a particularly useful role in overcoming the inefficiencies, high costs, and slow processing times of 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 as high as 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 might only cost a penny — it can arrive in a few minutes instead of hours or days.”
Increasing Cases of Stablecoins for Non-Cryptocurrency Uses
In a report sponsored by Visa, researchers surveyed about 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 purposes such as obtaining US dollars, generating profits, or trading are also very popular.
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Stablecoin Survey Results. Source: Castle Island Ventures.
The survey shows that, compared to other surveyed countries, Nigerian users have the strongest affinity for stablecoins. Nigerians use stablecoins for trading most frequently, have the largest share of stablecoins in their portfolios, utilize 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 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 needed 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 aim to reflect, the market is rapidly expanding, with hundreds of digital assets currently in circulation. However, many of these assets lack the transparency to support their reserves, and instances of stablecoins decoupling occur from time to time, and in some cases, even collapse.
Nevertheless, under the leadership of the Trump administration, the development momentum of stablecoins in the United States and emerging markets is strong, proving to be a powerful tool to help citizens overcome challenges related to financial inclusion and underdeveloped infrastructure.
