Stablecoins Increasingly Used for Savings, Payments in Emerging Countries

According to a report by investment company Castle Island Ventures and hedge fund group Brevan Howard published in September, stablecoins are increasingly used for everyday finance, such as savings, currency conversion, and cross-border payments in emerging markets.

According to a survey of more than 2,500 cryptocurrency users in Brazil, Nigeria, Turkey, Indonesia, and India, access to crypto markets is still the main motivation for using stablecoins. Still, there is also a wide range of common use cases that go beyond digital assets.

According to the survey, about 69% of respondents noted that they converted their local currency into stablecoins, 39% of them said that they bought goods or services for tokens and sent funds to relatives in another country, 30% - used stablecoins for their business, while 23% of surveyed respondents - paid or received salary in digital assets.

Individual users reported preferring to use stablecoins on the blockchain rather than bank transactions in US dollars due to greater efficiency, profit potential, and less likelihood of government interference.

Users of Tether (USDT), the largest stablecoin by market capitalization and known to be the most popular stablecoin in developing regions, noted that they use the token because of its network effects, user trust, liquidity, and history compared to other stablecoins.

Most respondents prefer Ethereum (ETH) as the top blockchain for stablecoin transactions, followed by Binance Smart Chain (BNB), Solana (SOL), and Tron (TRX).

"We felt a lack of data about how people are using stablecoins around the world, especially in emerging markets," Nick Carter, general partner of Castle Island, told CoinDesk.

"The response we received confirmed our beliefs about stablecoins: they are not only used for cryptocurrency trading, but increasingly this type of cryptocurrency is part of people's normal economic life," Carter said in a note to X.

Stablecoins are a class of cryptocurrency assets worth $160 billion, the price of which is tied to an external asset, primarily the US dollar.

They are an important part of the crypto industry and also serve as a bridge between cryptocurrencies and fiat money. However, as a recent survey confirmed, they are also becoming popular as a safe asset and cheap means of payment in developing regions with a history of currency devaluation and less developed banking systems.