A new report, sponsored by global payment giant Visa, has called out the growing influence of stablecoins in boosting U.S. dollar dominance around the world.
A new report, sponsored by global payment giant Visa, has called out the growing influence of stablecoins in boosting U.S. dollar dominance around the world, especially in countries with poor access to traditional dollar-based financial services.
The study, prepared by Castle Island Ventures and Brevan Howard Digital, shows that the use of stablecoins is on an upward trend, regardless of the cryptocurrency market cycle, and is increasingly used as a monetary instrument outside of digital asset trading and speculation.
According to data from Visa and Allium Labs, the transaction volumes of the stablecoin reached an astonishing $461 billion in August alone when adjusted for the inorganic activity created by blockchain bots. The figure is the third highest on record, higher than peaks during the 2021 bull run.
It also points out that a massive 98.97% of all stablecoins in circulation are backed by U.S. dollars. The leading stablecoin, Tether, currently accounts for 69% of the $170 billion stablecoin market.
This is from a survey of 2,541 people across Nigeria, India, Indonesia, Turkey, and Brazil, countries with limited traditional dollar banking services, in which 69% of the crypto users had converted their local currency to stablecoins. The authors believe that these conversions represent net inflows into dollars and not just a reshuffling of the existing dollar assets.
Interestingly, 39% of those surveyed have used stablecoins to buy goods or services, while another 39% have done international remittances with them. Up to 72% answered that they would increase the use of stablecoin in the future.
For many reasons including yield generation opportunities, greater efficiency, and lower risk of government interference, the report also showed that, in many ways, stablecoins were preferred over traditional USD banking. Stablecoin adoption was led by Nigeria, with the research showing that 75% of its respondents viewed these digital assets very favorably.
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