The Global Impact of Stablecoins

Tether made a record $6.2 billion in profits in 2023, surpassing even BlackRock, the world’s biggest asset manager. What does Tether do? They issue stablecoins. But the real story here is not about profits. Tether making more money than the world's largest asset manager with over $10 trillion in AUM is more than a financial milestone. It is a signal of a seismic shift in economic power, one that shows that stablecoins are not just disrupting the old system. They’re becoming the new system.

Stablecoins have quietly become the most successful mainstream application for crypto—the “killer app” of blockchain technology, if you will. Originally designed as a bridge between volatile crypto assets and stable fiat currencies, they are no longer just a tool for traders or tech-savvy investors. These digital currencies are now reshaping how the world handles value. They’re transforming how we think about value, trust, and exchange.

As the financial landscape changes, stablecoins are playing an increasingly critical role. Their value lies in their ability to provide something the world desperately needs: efficient, reliable, and accessible means of exchanging money. In regions where traditional banking systems are limited or dysfunctional, stablecoins are proving to be a lifeline. In economies grappling with inflation or currency devaluation, they offer a safe haven. And in a world where sending money across borders can be slow, costly, and prone to errors, stablecoins move at the speed of the internet—instantaneously, with minimal fees.

Beyond just a technical innovation, Stablecoins are becoming a tool for economic empowerment. They offer financial inclusion to the unbanked and underbanked, bypassing the need for conventional banking entirely. They stabilize economies teetering on the brink of collapse. They create new opportunities for cross-border trade and remittances, where money moves as fast as information.

Stablecoins are redefining what money is and how it works in the modern world. Their growing influence signals a fundamental shift in economic power and the way we exchange value. The question is no longer whether stablecoins will reshape the global economy but how far this transformation will go.

Stablecoins as a New Economic Powerhouse

Stablecoins have become serious competitors to the world’s largest financial institutions. Tether’s success is more than a sign of a booming market; it signals that stablecoins are on the path to becoming major players in global finance, rivalling banks, asset managers, and payment processors. What was once seen as a niche innovation is rapidly evolving into a cornerstone of modern finance, bridging the gap between traditional banking and the decentralized future.

At the heart of their success is their ability to combine the stability of fiat currencies with the efficiency of blockchain technology. For years, traditional finance offered reliability but lacked the speed and accessibility that today’s world demands. Stablecoins offer a way to transact quickly, securely, and without the volatility that defines most cryptocurrencies. And they’re not just benefiting crypto enthusiasts. They’re reaching into the heart of global commerce and finance, transforming how value is exchanged on a massive scale.

The Evolution of Value Exchange

Understanding the revolutionary nature of stablecoins helps one look back at the history of trade. During the medieval era, at the height of the Mali and Songhai empires, the trade routes between Kano, Timbuktu, and Morocco were bustling arteries of commerce. Merchants travelled great distances, braving deserts and mountains, to exchange goods like gold, salt, and textiles. These routes, traversed by camel caravans, connected the gold fields of West Africa with the bustling markets of North Africa, creating an economic network that allowed wealth to flow across vast distances. The value exchanged along these routes was as much about the goods themselves as it was about the stability of the currencies that passed through the hands of traders.

Stablecoins carry forward the same principles that governed these ancient trade networks. Today, instead of camels and caravans, we have blockchain technology facilitating the global exchange of value. Just as gold provided a stable store of value for merchants across the Sahara, stablecoins offer modern traders and individuals a reliable means to store and transfer value across borders. The trust that once resided in gold now finds its equivalent in blockchain’s transparency, where every transaction can be verified in real-time. Stablecoins eliminate the friction of geography, just as those old trade routes did—only they do it faster, cheaper, and more inclusively.

Stablecoins as a Medium of Exchange

Unlike traditional currencies, which are tethered to nations and subject to the ups and downs of national economies, stablecoins offer a stable, borderless alternative. They aren't beholden to the whims of central banks or geopolitical shifts. Instead, they provide a universal currency that can be transferred anywhere, at any time, without relying on banks or middlemen. And that changes everything.

For countries plagued by inflation or currency instability, stablecoins provide a way to protect wealth. In places where a local currency can lose value overnight, holding stablecoins pegged to the US dollar or any other stronger foreign currency offers a level of security that traditional financial systems often can’t provide. Stablecoins allow individuals to store their wealth in a currency that doesn’t fluctuate wildly, giving them a reliable way to transact in a stable medium.

But beyond personal finance, stablecoins are revolutionizing global commerce. Businesses that once had to navigate a maze of exchange rates, bank fees, and cross-border regulations now have a more direct route. Stablecoins allow for instantaneous transactions, whether you're paying a supplier halfway across the world or sending remittances back home. This is particularly transformative for regions where access to the global financial system has been limited by geography or politics. Stablecoins open doors that traditional currencies can’t because they aren't constrained by the same borders. They are creating a world where money moves as freely as information, unbound by the limitations of banks, borders, or time zones.

Financial Inclusion and Stability in Developing Economies

In many emerging markets, the local currency is more of a liability than a reliable store of value. People living in countries like Nigeria have faced years of rapid inflation, where the value of their money can plummet overnight. For these economies, stablecoins have become a lifeline. As local currencies devalue, people increasingly turn to stablecoins as a hedge against the volatility that undermines their purchasing power. By converting their naira or pesos into dollar-pegged digital assets, they can protect their wealth from eroding. In these unstable financial landscapes, stablecoins offer stability, something traditional currencies in these regions often cannot guarantee.

Stablecoins as a Safe Haven for Savings

In economies where inflation can reach double digits in a single year, saving in local currency becomes a gamble. Nigeria’s inflation rate, for instance, hit a record high of 34.19% in June of this year. For many Nigerians, stablecoins provide an alternative that is not only accessible but stable. With the value of these digital currencies pegged to stronger assets like the US dollar, individuals can store their savings without fear of devaluation. This is evident in the country's rapid adoption of stablecoins and digital assets, ranking Nigeria second globally. In places like Argentina and Venezuela, where runaway inflation has decimated the value of life savings, stablecoins offer people a way to preserve their wealth. The simplicity of converting local currencies into stablecoins provides a much-needed buffer against the crushing instability that these economies face.

International Transactions Made Simple

Stablecoins are also simplifying international transactions, particularly for those in developing economies who need to access foreign markets or services. Whether you are paying for international education, purchasing goods from abroad, or sending remittances back home, stablecoins streamline these processes. Traditional cross-border payments can be costly and time-consuming, with bank fees, unfavourable exchange rates, and delays bogging down the system. In 2022, remittances to low- and middle-income countries hit a staggering $626 billion, according to the World Bank. Yet, traditional remittance services charge an average of 6% per transaction. That’s $45 billion in fees, money that could have stayed in the hands of those who need it most. With stablecoins, these transactions happen almost instantly and without the exorbitant fees that come with traditional banking methods.

For example, a Nigerian student studying abroad no longer has to rely on banks to convert naira to dollars and face long wait times or hefty conversion fees. Instead, they can use stablecoins to pay tuition fees or access funds, enabling fast, low-cost international payments that eliminate the need for multiple intermediaries. The ability to bypass banks and payment processors makes stablecoins a practical tool for anyone navigating the complexities of cross-border finance.

Bridging the Financial Access Gap

For millions of people worldwide, access to traditional financial services is either restricted or completely unavailable. In many rural areas, especially across Africa and Southeast Asia, banks are scarce, and opening a bank account often requires more documentation than most people can provide. Stablecoins, however, are opening new doors for the unbanked and underbanked. With just a smartphone and internet connection, individuals can set up a digital wallet and begin transacting globally, something that was previously out of reach. With digital wallets, people can not only hold funds but also send and receive payments from anywhere in the world. This is particularly transformative for migrant workers and those in rural economies who rely on remittances or need a way to participate in the broader financial system.

Opportunities for Investment and Growth

Stablecoins are also opening up new avenues for investment, particularly for individuals in emerging markets who have traditionally been cut off from global financial opportunities. In economies where access to foreign investments has been limited by regulatory barriers or the complexities of currency conversion, stablecoins offer a new route. With stablecoins, individuals can access decentralized finance (DeFi) platforms, where they can grow their savings through yield-generating opportunities or invest in assets that were previously out of reach.

DeFi allows individuals to earn yields on their stablecoin holdings (eg. sUSDe), much like interest in a savings account, but often at higher rates. In regions where local banking systems offer minimal interest on savings—if any at all—DeFi platforms present an attractive alternative. People can earn returns on their stablecoins through lending, liquidity provision, or even staking, creating opportunities for personal financial growth that didn’t exist before. In addition to yield generation, stablecoins allow users in emerging markets to participate in the global investment landscape. By holding digital assets that are accepted globally, individuals can invest in international markets, whether through stocks, bonds, or cryptocurrencies. Stablecoins give people in countries with limited financial infrastructure a way to engage with the broader economic world and take control of their financial futures.

Empowering Global Commerce

Beyond individual financial growth, stablecoins are playing a critical role in global commerce. By reducing the cost and complexity of cross-border payments, they are making it easier for businesses and individuals alike to engage in international trade. In traditional financial systems, sending money across borders can involve a labyrinth of banks, payment processors, and currency conversion, each step introducing friction and fees. Stablecoins cut through this, allowing money to flow directly from one party to another. Today, approximately 30% of global remittances are now facilitated through stablecoins.

For businesses, this means lower transaction costs and faster payments, enabling them to trade with international partners without the delays that come with bank transfers. For individuals, it means being able to participate in the global economy on an even footing with those in more developed markets. Whether you are paying suppliers in another country, receiving payments for freelance work, or simply buying products from abroad, stablecoins are facilitating a new level of global commerce.

Onchain is the New Online – The Future of Value Exchange

The internet revolutionized how we share information, making “online” the new standard for communication, business, and social interaction. Now, we’re witnessing a similar transformation with value exchange, where “onchain” is becoming the new normal. Just as the internet made information exchange instantaneous and global, blockchain is reshaping how value moves across the world. Stablecoins are central to this shift, acting as the foundational element that powers these onchain transactions. In this onchain future, value is exchanged with the same ease as sending a message or making a purchase online. And just as the internet was once a novelty and is now essential, stablecoins are quickly becoming a crucial part of how money will work in the years ahead.

The Adoption Curve and the Billion-User Threshold

We’re nearing a tipping point in the adoption of stablecoins and blockchain technology. The widespread use of these digital assets is following a classic adoption curve, and the threshold of 1 billion global users could be the moment when stablecoins go mainstream. Just as the internet reached mass adoption when it crossed the billion-user mark in 2005, stablecoins are on a similar trajectory.

Today, there are already millions of people using stablecoins. As of May 2024, over 27.5 million active stablecoin addresses transact globally, and in 2023 alone, over $10.8 trillion worth of value transfer were enabled by stablecoins. However, when the global user base surpasses 1 billion, stablecoins will likely become as ubiquitous as email or social media. It’s not hard to imagine a world where everyone, from small business owners to large corporations, relies on stablecoins for everyday transactions.

Much like the early days of the internet, we’re seeing the groundwork being laid. From remittances in Nigeria to decentralized finance platforms in the US, stablecoins are already playing a major role in the global financial ecosystem. But as more people come on board and see the benefits, this network effect will explode, pushing stablecoins past the tipping point and into widespread use. This is the critical juncture where the shift from niche to necessity will happen, transforming the future of finance.

Digital Engagement and Onboarding Users

If you are wondering what is driving this accelerated adoption? Take a look at everyday digital activities like gaming, social media, and meme tokens that are now helping to familiarize millions of people with blockchain and stablecoins—often without them even realizing it. As users engage with tap games on Telegram or participate in meme token airdrops, they’re becoming part of the onchain economy in ways that feel seamless and fun.

Telegram, for instance, has introduced tap games where players can win tokens or interact with blockchain-based systems. These activities are more than just entertainment. They are creating a soft onboarding experience into the world of crypto. Users who might have never thought about engaging with blockchain are suddenly using it for small transactions, exchanging tokens, or participating in social incentives. This is gamification in its most powerful form—taking something complex and making it intuitive.

Meme tokens, popularized on social platforms, are another driver of engagement. These tokens, often distributed via airdrops, bring blockchain into the hands of millions of users. What starts as a playful interaction—receiving a meme token for engaging in a game or community—becomes an introduction to the broader blockchain economy. Before long, users realized they could trade, hold, or exchange these tokens, and they were suddenly part of an ecosystem where stablecoins played a central role.

This digital engagement blurs the lines between entertainment, social interaction, and financial participation. It’s also accelerating the mainstream integration of stablecoins into everyday economic activities. As these platforms continue to grow, they will bring blockchain and stablecoins to billions of users, turning what once seemed like a niche financial tool into a natural part of daily life.

The Future of Stablecoins – Opportunities for Growth and Integration

As global financial systems evolve, stablecoins are positioned to grow in key areas like decentralized finance (DeFi), global remittances, and digital commerce. The $79 billion DeFi market is already thriving, with stablecoins serving as the bedrock for lending, borrowing, and liquidity provision. As DeFi platforms continue to mature, stablecoins will be essential for bridging the gap between traditional finance and the digital economy. In digital commerce, stablecoins have the potential to revolutionize the way people pay for goods and services. With over 2.71 billion people currently buying goods and services online at a 2.7% YoY growth rate, the need for fast, secure, and cost-effective payment solutions is clear. Stablecoins offer a seamless alternative to traditional payment processors, reducing merchant fees and providing consumers with instant, cross-border transactions. The opportunity for further integration into the everyday lives of billions of people is vast.

However, as stablecoins continue to gain traction, governments are faced with a choice—adapt or resist. Some nations have already expressed concerns about stablecoins’ impact on monetary sovereignty, fearing that the rise of digital currencies could undermine traditional financial systems. But can governments truly stop the inevitable growth of stablecoins? The global demand for efficient, borderless value exchange is undeniable, and history has shown that when people are presented with a superior solution, they will adopt it, even if it goes against established norms.

In many ways, governments that try to fight the rise of stablecoins may find themselves fighting a losing battle. The underlying demand for a stable, accessible, and efficient means of transferring value will not simply vanish because of regulatory pushback. People, businesses, and even financial institutions are increasingly drawn to the benefits of stablecoins. They offer what traditional currencies often cannot—protection from inflation, seamless cross-border payments, and the ability to move money at the speed of the internet. This is not a trend that can be halted with blanket bans or restrictive policies. The desire for global value exchange is only growing, and stablecoins are meeting that demand in a way that conventional financial systems have struggled to achieve.

How Nation-States Can Benefit

That said, there is immense potential for governments to turn this challenge into an opportunity. Forward-thinking nation-states can harness the benefits of stablecoins to improve financial inclusion, foster transparency, and facilitate international trade. Similar to what the El Salvadoran government did by adopting and integrating Bitcoin, regions where traditional financial infrastructure is underdeveloped could leverage stablecoins to provide millions of unbanked individuals with access to the financial system, allowing them to save, spend, and participate in the global economy without relying on costly intermediaries.

Rather than opposing this shift, governments should explore ways to integrate stablecoins into their economies. This does not mean abandoning regulatory oversight—far from it. Governments can ensure that these digital currencies comply with important safeguards such as anti-money laundering (AML) and know-your-customer (KYC) regulations by working alongside stablecoin issuers. At the same time, they can allow stablecoins to flourish in a controlled environment that prioritizes both innovation and consumer protection.

One potential solution lies in the concept of central bank digital currencies (CBDCs), which could coexist with private stablecoins. I know many people are wary of CBDCs. The fear that they could lead to increased government surveillance and control over personal financial activities is very understandable. To address these concerns, governments need to focus on creating a regulatory framework that supports the growth of private stablecoins while safeguarding privacy and security. Rather than imposing a one-size-fits-all solution, this approach would prioritize user privacy, enforce strong data protection measures, and ensure financial transparency without sacrificing personal freedoms.

A more balanced model could involve private stablecoins and government-backed digital currencies coexisting, each serving different needs. Private stablecoins would continue to drive innovation and offer decentralized financial services, while governments could ensure stability through light-touch regulation, focusing on security and preventing misuse. This collaborative approach would allow stablecoins to thrive in a way that respects individual privacy and freedom while integrating them into the broader financial system for the benefit of all. In the end, the future of stablecoins will be shaped not by resistance but by how quickly governments and institutions embrace the potential for growth and integration.

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