Stablecoins as a Solution for Financial Stability in Emerging Markets

I am often asked by friends who are not as familiar with Crypto what the “real” applications are - here is my typical answer! 🖖 In Developed Markets - Gambling / Speculation In countries like the US and the UK, Crypto has found product market-fit in speculation/gambling because: 1. Most token prices are very volatile going up and down very quickly 2. This creates news headlines and FOMO, so people think they can get rich quick. Obviously, this often goes wrong, just like gambling in a casino. Inevitably, people look down on gambling but humans are drawn to it and have been for a long time. As far back as 1916, $268m was wagered on the outcome of the US Presidential Election [1]. Whether it is ethical or not is a different question. 👉 In Developing Markets - Holding US Dollars In markets like Turkey and Argentina, Stablecoins (i.e. tokens that can be redeemed for a fixed amount of fiat currency like $1) are increasingly owned. Consumers want to hold US dollars to ensure the value of their savings don’t get eroded - by inflation or government policy. Stablecoins combined with blockchain settlement help them tackle two problems: 1. Local currency inflation: In 2023, inflation in Argentina and Turkey was 211% and >60% respectively [2]. The value of consumers’ local currency savings fall quickly so they want to own USD, which has much lower inflation. 2. Capital restrictions: In these countries, governments have confiscated assets and put restrictions on sending money abroad and how much foreign currency you can own. If assets are stored in self-custody blockchain wallets, a government can’t freeze your account like they can in a bank or exchange. In Turkey, I’ve seen 80 year olds on the street wearing Binance hats - holding stablecoins is not niche. It is common practice to buy USDT and store it on Binance or in a self-custody wallet. This market is already sizeable and growing fast [3]: 1. In 2022, >$11 trillion in stablecoin transactions were settled, dwarfing PayPal volumes ($1.4 tn) and comparable with Visa ($11.6 tn). 2. Supply of stablecoins has grown from $3bn five years ago to >$120bn in mid-2023. 3. >2/3 of stablecoins are held in self-custody wallets i.e. outside exchanges like Binance. 4. There are 25 million blockchain addresses holding stablecoins and 5 million sending stablecoins each week. As this market grows, we’re seeing business opportunities in areas like remittances. If you’ve seen other Crypto use cases in action now - I’d love to hear from you! [1] Historical Presidential Betting Markets - $165m in 2002 dollars converted to 2022 dollars: https://lnkd.in/gaGnh397 [2] 2023 Inflation in Argentina: https://lnkd.in/gNBdKvJF [3] Brevan Howard - The Relentless Rise of Stablecoins: https://lnkd.in/gSdAivei

This week, the GENIUS Act passed on a bipartisan basis and was signed into law. GENIUS creates a framework for how we can use and issue stablecoins in the US. A lot of my friends are crypto skeptics, but if you care about a more accessible financial system and a stronger dollar, you should care about stablecoins. This is a monumental change in how money will move globally and an opportunity to re-entrench the dollar as the world’s reserve currency. Here are some implications of a new stablecoin regulatory regime: Cheaper, faster remittances: 10% of remittances from the US to Mexico are already in stables. Stablecoins cut out high middlemen fees and make it simpler to reach family members who don’t have easy access to a Moneygram location or bank, and send them money 24/7. Cross-border/global payments: Uber and Airbnb are exploring stablecoins to simplify global payouts, making it faster and cheaper for gig-workers and freelancers to access their earnings. Nonprofits and NGOs like Mercy Corps and the World Food Program are exploring stablecoins to make it easier to move money between offices in different countries, cutting operational overhead and making it faster to deliver funds where they’re needed most. Increasing global access to and reliance on dollars: As Americans, we’re privileged to have never experienced serious currency volatility. Countries like Turkey and Argentina have some of the highest stablecoin adoption rates in the world, because people use USD-pegged stablecoins as a savings mechanism and a protection against volatility. (Stablecoin purchases in Turkey represent 3.7% of GDP). GENIUS helps ensure that the dollars they hold are truly worth real dollars, helping maintain US-dollar dominance - critical for American national and economic security. TLDR: Don’t let your crypto skepticism let you ignore the impact of stablecoins on the global economy or American security. No bill is perfect, but we often spend too long letting the perfect be the enemy of the good when it comes to tech regulation. Stablecoin legislation is a long overdue step in helping us lead the world in technology, establish clear rules for stablecoin issuance, and create a more open, accessible financial system. (A good read on stables adoption in emerging markets, if you're curious: https://lnkd.in/eAy5r4DN)

He landed in Lagos, Nigeria with a 6-day-old passport, no visa, no shots, and a one-way ticket... and built the first licensed stablecoin on/off-ramp in Africa. This is the wild origin story of Yellow Card and its founder Chris Maurice, who started a college side hustle flipping Pokémon cards and ended up building a global fintech infrastructure company now operating in 40+ countries. 🌍 From Nigeria to South America to Southeast Asia, Yellow Card is transforming the way emerging markets access and move dollars—leveraging stablecoins to replace broken remittance systems and unlock cross-border payments. Key insights from the episode: 🔸Why traditional remittance is broken—and how stablecoins fix it 🔸How $1M/month in volume became $15M/day post-COVID 🔸What "true" product-market fit feels like 🔸Why stablecoins are a Trojan Horse for global dollar adoption 🔸Why financial inclusion isn’t the problem—it’s liquidity 🔸And the honest truth about doing business in emerging markets ("a lot of hot guys on the internet..." 😂 ) This conversation is one of my favorites—equal parts hilarious, insightful, and visionary. YouTube: https://lnkd.in/gNEbkXBa Spotify: https://lnkd.in/gWijMYgj