🔥Early Access: Land A High Paying Web3 Job In 90 Days LEARN MORE

Stablecoin use grows globally as report predicts $5.28 trillion settlements this year

In this post:

  • Stablecoins settlement will cross $5 trillion in 2024 according to a recent survey.
  • Crypto users in emerging economies are using stablecoins for multiple non-crypto purposes.
  • Nigeria has the highest usage of stablecoins and most people use it to save in dollars.

A new report states that stablecoin settlements could reach $5.28 trillion by the end of this year. The report was sponsored by venture capital firm Castle Island and fintech giant Visa and included contributions from Artemis and Brevan Howard Digital.

According to the report, transactions settled in stablecoins reached $2.62 trillion in the first half of the year, leaving an annualized rate of $5.28 trillion. The report, Stablecoins: The Emerging Market Story, focused on stablecoins usage in emerging markets to see how the average person uses fiat-pegged digital currencies.

The report noted that stablecoins’ growth despite crypto market struggles and exchange volume declines shows that people use stablecoins for other purposes.

It said:

“Based on the divergence between stablecoin activity and crypto market cycles, it is evident that stablecoin adoption has moved beyond merely serving crypto users and trading use cases.”

With stablecoin settlement expected to reach $5.3 trillion this year, the figure will eclipse last year’s volume of $3.7 trillion. There are already clear signs that stablecoin use is growing, with a market cap of around $170 billion and around 20 million addresses transacting in stablecoins monthly.

Use of stablecoins not limited to crypto trading

Although the common perception is that stablecoins are mostly used for crypto trading, the survey, which interviewed 2,541 crypto users in Nigeria, India, Brazil, Turkey, and Indonesia, reveals that there are other widespread uses of stablecoins.

See also  BlockDAG Races to the $100M Milestone! Kaspa Investors Reap High Returns & Notcoin Eyes a Huge Rally

47% of respondents use stablecoins to save in dollars, 43% prefer them for better currency conversion rates, and 39% use these assets to earn yields. Other popular uses include cross-border transfers by 32%, payments by 33%, and personal finance by 34%. However, about 50% of respondents still use stablecoins for trading crypto and non-fungible tokens.

Stablecoin Usage.
Stablecoin Usage. (Source: Castle Island Ventures)

Nevertheless, the existence of multiple use cases outside of crypto trading activity shows that the annual growth in stablecoin settlements is not only due to crypto market speculation. In fact, the asset class is finding more adoption outside of crypto and that looks set to continue.

57% of respondents said they increased their usage of stablecoins this year, while 72% plan to use it more in the future. Unsurprisingly, Tether USDT is the most popular stablecoin among respondents, highlighting the mass usage of USDT in emerging economies.

Most Nigerians prefer stablecoins for saving in dollars

Meanwhile, Nigeria has the highest stablecoin usage rate among the five countries surveyed, with most of the respondents in the country saying they use stablecoins to save in US dollars. The growing adoption of stablecoin in the country is mostly due to its depreciating Naira currency, forcing many residents to flee to more stable foreign currencies.

See also  The FBI launched honeypot NEXF token, doxxed some of its wallets

Castle Island co-founder Nic Carter highlighted Nigerians’ love for stablecoins, noting that the country might be experiencing crypto dollarization.

Stablecoins Usage.
Stablecoin Usage. (Source: Castle Island Ventures)

Carter said:

“I think there actually is a crypto dollarization event happening in Nigeria as far as I can tell, where people are actively deserting the Naira and going to dollars via stablecoins. I think this is ongoing. It’s the first real crypto dollarization event.”

Interestingly, the country topped every category as it had the most people using stablecoins for transactions, the highest use for non-crypto purposes, the highest number of people with self-reported knowledge of stablecoins, and the highest stablecoin-dominated portfolio.

While this highlights the level of adoption in the country, it could serve as justification for the Nigerian government’s claim that crypto is responsible for the Naira depreciation, leading to a crackdown on the industry and the ban of the Binance exchange. One of Binance’s executives, Tigran Gambaryan, remains under detention in Nigeria and faces charges of money laundering as a fall-out of the crackdown.

Share link:

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

Most read

Loading Most Read articles...

Stay on top of crypto news, get daily updates in your inbox

Related News

Cryptopolitan
Subscribe to CryptoPolitan