Five years in the past, SpaceX launched Starlink, which has since grown into its largest income driver, increasing to greater than 100 nations. But as Starlink scaled, it confronted a significant hurdle: accepting funds in creating markets, the place conventional banking infrastructure is unreliable, sluggish, and vulnerable to blocking transactions. Many native banks throughout Africa, Latin America, and Asia wrestle with worldwide funds, forcing SpaceX to search for options.
To bypass these challenges, SpaceX turned to stablecoins, a fast-growing methodology for cross-border funds already extensively used in emerging markets. The firm partnered with Bridge, a stablecoin funds platform, to simply accept funds in varied currencies and immediately convert them into stablecoins for its international treasury.
This transfer positioned Bridge as a viable various to correspondent banks in markets the place conventional monetary methods fall brief. Soon after, Stripe took discover, buying the startup for greater than $1 billion and solidifying Bridge’s popularity and driving up its valuation as an infrastructure participant, fixing inefficiencies in international finance.
The rise of stablecoins — now a $205 billion market — is pushed by real-world utility, not hypothesis, notably in emerging markets the place essentially the most compelling use circumstances unfold. Cross-border funds in these areas are usually sluggish and costly, involving a number of intermediaries. For instance, a textile producer in Brazil paying a provider in Nigeria may need to undergo a number of banks and foreign money exchanges, every including charges and delays. Stablecoins take away this friction, enabling cheaper, near-instant transactions.
Adoption and investor curiosity surge
This rising demand has led to huge transaction quantity progress for startups offering stablecoin cross-border options for companies in Africa and emerging markets.
Yellow Card, which gives a platform that lets customers convert fiat to crypto and again to fiat, doubled its annual transaction quantity to $3 billion in 2024 from $1.5 billion in 2023. Conduit, which permits stablecoin funds for import-export companies in Africa and Latin America, noticed its annualized TPV soar to $10 billion from $5 billion. Lagos-based Juicyway, which facilitates cross-border funds utilizing stablecoins, has processed $1.3 billion in complete cost quantity up to now.
Investor curiosity has additionally surged, with high enterprise corporations backing stablecoin-powered fintechs focusing on these markets.
Peak XV and HongShan, the corporations that cut up from Sequoia, co-led a $10 million seed spherical in KAST, a neobank that lets customers maintain and spend stablecoins. Sequoia itself was a significant backer of Bridge. Yellow Card raised $33 million, led by Blockchain Capital. QED Investors led a $9.9 million funding in Cedar Money, a stealthy fintech utilizing stablecoins for cross-border transactions. Initialized led an $8.5 million spherical in Caliza, which is bringing real-time transfers to Latin-America utilizing USDC.
Tether itself invested a large examine in an African stablecoin infra and liquidity supplier, Ztoog has realized. Meanwhile, Conduit, which raised a $6 million seed spherical final yr, is finalizing one other spherical with some big-name backers.
The pattern is evident: Stablecoins are now not a crypto experiment — they are changing into a core a part of monetary infrastructure in emerging markets to maneuver cash globally. As adoption accelerates, the query just isn’t if stablecoins will remodel funds however how rapidly they are going to stand alongside — and even change — outdated monetary methods.
Some numbers replicate this shift. According to a16z, sending $200 from the U.S. to Colombia by way of stablecoins prices lower than $0.01, in comparison with $12.13 utilizing conventional strategies. Payment platforms are adapting, making a reduce, albeit a smaller one than the standard middlemen rails. Stripe, as an illustration, now costs 1.5% for stablecoin transactions, 30% decrease than its customary card charges.
Businesses and people are additionally utilizing stablecoins as a hedge towards inflation and a extra steady retailer of worth, with USDT and USDC changing into vital instruments.
Applications exterior cross-border and remittance
While cross-border funds and remittances have pushed early adoption, stablecoins are now gaining traction in client finance, payroll, and, partly, retail transactions.
This January, Brazilian unicorn Nubank launched a characteristic rewarding USDC holders with a 4% annual return, following a tenfold improve in customer-held USDC final yr. Now, 30% of Nubank’s customers have USDC in their portfolios. Nubank joins different fintech giants like Venmo, Apple Pay, PayPal, Cash App, and Revolut, which already allow in-app stablecoin transactions.
Beyond client financial savings, stablecoins are reshaping international payroll. As distant work expands, startups like Rise enable firms to pay contractors utilizing stablecoins. The platform lets companies pay in fiat whereas contractors obtain stablecoins like USDC or USDT, avoiding foreign money volatility. Last November, Rise raised $6.3 million in Series A, fueling its enlargement in stablecoin-powered payroll options.
“The market is going where we are building and it’s only a matter of time until the big players get in the arena. They will offer stablecoins by partnering, acquiring, or building a crypto payment infrastructure,” Rise CEO Hugo Finkelstein advised Ztoog.
And whereas retail adoption of stablecoins has been slower, startups like Cashnote.io are testing options. The platform, developed by Korean fintech Korea Credit Data and web3 VC agency Hashed, permits retailers to simply accept bank card and digital asset funds by way of a point-of-sale system. Merchants can course of funds utilizing stablecoins with out the restrictions of bank card limits and shoppers can use digital property for on a regular basis purchases.
Both corporations are testing Cashnote in the Abu Dhabi Global Market (ADGM), projecting to go reside with retailers in the area over the approaching months, with UAE-based digital property infra supplier Fuze as its settlement companion. Fuze raised a $14 million seed in 2023.
Yet, regardless of stablecoins’ potential to streamline funds globally, issues stay. For one, critics warn that stablecoins might disrupt financial coverage. As they change into extra widespread in international finance, some fear they might mirror previous issues about dollarization, the place economies rely too closely on the U.S. greenback as an alternative of constructing unbiased monetary methods.
Similarly, their effectivity comes with trade-offs. Unlike government-backed currencies, they depend upon personal firms like Circle and Tether to keep up their worth. These firms use money reserves, short-term securities, and different monetary property to maintain stablecoins pegged to the U.S. greenback. However, the 2022 collapse of TerraUSD reveals how weak stablecoins may be.
Regulatory shifts might make or mar adoption
Governments and regulators worldwide are paying consideration, and their actions will affect stablecoin adoption. Some areas like Abu Dhabi’s ADGM, for instance, have positioned themselves as crypto-friendly zones, enabling fintech corporations to experiment with stablecoin funds. Hashed CEO Simon Kim says Cashnote.io might solely work in the area because of the area’s structured and supportive authorized framework.
“There’s hardly a government like Abu Dhabi that accelerates innovation from new challengers abroad like this,” Kim advised Ztoog. “It has many sandboxes and government support systems for testing innovative and new crypto infrastructure.”
Similarly, the UAE made headlines final yr when a court docket ruling permitted salaries to be paid in crypto, reinforcing the nation’s place as a world hub for digital asset innovation.
Africa presents a unique present. In many circumstances, innovation strikes sooner than regulation, forcing policymakers to react solely after fintech proves its worth — simply as they did with cellular cash, in keeping with Zekarias Amsalu, co-founder of one in every of Africa’s high fintech occasions. He believes regulators, relatively than being overtly cautious, ought to embrace stablecoins as they already assist scale back cross-border switch and remittance prices by as much as 75%.
“If you are willing to formalize Franco-Valuta [policy that allows the import of goods without using foreign exchange from a bank] when the dollar crunch bites, against all real risks, why not consider formalizing stablecoins that are provided by licensed exchanges with all transparency and compliance?” Amsalu posits.
Whether their stance adjustments or not might depend upon how regulation shapes up in the U.S., which is contemplating new legal guidelines that may have a world influence on stablecoins: A strict regulatory strategy — although unlikely — might sluggish adoption and impose tighter monetary controls on issuers. On the opposite hand, a pro-stablecoin stance might encourage extra nations to create clear licensing guidelines for digital property. “These are very strong signals for investors,” Finkelstein stated.