5 years in the past, SpaceX launched Starlink, which has since grown into its largest income driver, increasing to greater than 100 nations. However as Starlink scaled, it confronted a serious hurdle: accepting funds in growing markets, the place conventional banking infrastructure is unreliable, gradual, and susceptible to blocking transactions. Many native banks throughout Africa, Latin America, and Asia wrestle with worldwide funds, forcing SpaceX to search for alternate options.
To bypass these challenges, SpaceX turned to stablecoins, a fast-growing technique for cross-border funds already broadly utilized in rising markets. The corporate 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 different to correspondent banks in markets the place conventional monetary methods fall quick. Quickly after, Stripe took discover, buying the startup for greater than $1 billion and solidifying Bridge’s fame 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, significantly in rising markets the place probably the most compelling use circumstances unfold. Cross-border funds in these areas are usually gradual 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 forex 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 large transaction quantity development for startups offering stablecoin cross-border options for companies in Africa and rising markets.
Yellow Card, which supplies 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 allows stablecoin funds for import-export companies in Africa and Latin America, noticed its annualized TPV bounce to $10 billion from $5 billion. Lagos-based Juicyway, which facilitates cross-border funds utilizing stablecoins, has processed $1.3 billion in complete fee quantity so far.
Investor curiosity has additionally surged, with prime enterprise companies backing stablecoin-powered fintechs concentrating on these markets. Peak XV and HongShan, the companies 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 serious backer of Bridge. Yellow Card raised $33 million, led by Blockchain Capital. Conduit, which raised a $6 million seed spherical final 12 months, is finalizing one other spherical. In the meantime, QED Buyers led a $9.9 million funding in Cedar Cash, 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 test in an African stablecoin infra and liquidity supplier, fomofactorynews has discovered.
The pattern is evident: Stablecoins are now not a crypto experiment — they’re turning into a core a part of monetary infrastructure in rising markets to maneuver cash globally. As adoption accelerates, the query 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. In response to a16z, sending $200 from the U.S. to Colombia through stablecoins prices lower than $0.01, in comparison with $12.13 utilizing conventional strategies. Cost platforms are adapting, making a reduce albeit a smaller one than the normal middlemen rails. Stripe, for example, now fees 1.5% for stablecoin transactions, 30% decrease than its normal card charges. Companies and people are additionally utilizing stablecoins as a hedge towards inflation and a extra secure retailer of worth, with USDT and USDC turning into essential instruments.
Functions outdoors cross-border and remittance
Whereas cross-border funds and remittances have pushed early adoption, stablecoins are actually gaining traction in client finance, payroll, and, partly, retail transactions.
This January, Brazilian unicorn Nubank launched a function rewarding USDC holders with a 4% annual return, following a tenfold enhance in customer-held USDC final 12 months. Now, 30% of Nubank’s customers have USDC of their portfolios. Nubank joins different fintech giants like Venmo, Apple Pay, PayPal, Money App, and Revolut, which already allow in-app stablecoin transactions.
Past client financial savings, stablecoins are reshaping international payroll. As distant work expands, startups like Rise permit corporations to pay contractors utilizing stablecoins. The platform lets companies pay in fiat whereas contractors obtain stablecoins like USDC or USDT, avoiding forex volatility. Final November, Rise raised $6.3 million in Collection A, fueling its enlargement in stablecoin-powered payroll options.
“The market goes the place we’re constructing and it’s solely a matter of time till the massive gamers get within the area. They are going to supply stablecoins by partnering, buying, or constructing a crypto fee infrastructure,” Rise CEO Hugo Finkelstein advised fomofactorynews.
And whereas retail adoption of stablecoins has been slower, startups like Cashnote.io are testing options. The platform, developed by Korean fintech Korea Credit score Knowledge and web3 VC agency Hashed, allows retailers to simply accept bank card and digital asset funds through a point-of-sale system. Retailers 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.
Each companies are testing the platform within the Abu Dhabi International Market (ADGM), one of the vital crypto-friendly regulatory environments globally. Cashnote.io is projecting to go reside with retailers within the area over the approaching months, with UAE-based digital property infra supplier Fuze performing because the settlement associate. Fuze raised a $14 million seed in 2023.
But, regardless of stablecoins’ potential to streamline funds globally, considerations stay. For one, critics warn that stablecoins might disrupt financial coverage. As they develop into extra widespread in international finance, some fear they may mirror previous considerations about dollarization, the place economies rely too closely on the U.S. greenback as a substitute of constructing impartial monetary methods.
Equally, their effectivity comes with trade-offs. Not like government-backed currencies, they depend upon personal corporations like Circle and Tether to keep up their worth. These corporations use money reserves, short-term securities, and different monetary property to maintain stablecoins pegged to the U.S. greenback. Nevertheless, the 2022 collapse of TerraUSD exhibits how susceptible stablecoins could 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 companies to experiment with stablecoin funds. Hashed CEO Simon Kim says Cashnote.io might solely work within the area as a result of area’s structured and supportive authorized framework.
“There’s hardly a authorities like Abu Dhabi that accelerates innovation from new challengers overseas like this,” Kim advised fomofactorynews. “It has many sandboxes and authorities help methods for testing revolutionary and new crypto infrastructure.”
Equally, the UAE made headlines final 12 months when a courtroom ruling permitted salaries to be paid in crypto, reinforcing the nation’s place as a worldwide hub for digital asset innovation.
Africa presents a unique present. In lots of circumstances, innovation strikes sooner than regulation, forcing policymakers to react solely after fintech proves its worth — simply as they did with cellular cash, in response to Zekarias Amsalu, co-founder of one in all Africa’s prime fintech occasions. He believes regulators, slightly than being overtly cautious, ought to embrace stablecoins as they already assist cut back cross-border switch and remittance prices by as much as 75%.
“In case you are prepared to formalize Franco-Valuta [policy that allows the import of goods without using foreign exchange from a bank] when the greenback crunch bites, towards all actual dangers, why not contemplate formalizing stablecoins which might be supplied by licensed exchanges with all transparency and compliance?” Amsalu posits.
Whether or not their stance modifications or not might depend upon how regulation shapes up within the U.S., which is contemplating new legal guidelines that will have a worldwide influence on stablecoins: A strict regulatory strategy — although unlikely — might gradual adoption and impose tighter monetary controls on issuers. However, a pro-stablecoin stance might encourage extra nations to create clear licensing guidelines for digital property. “These are very robust indicators for traders,” Finkelstein stated.
