Stablecoins gain utility in emerging markets and Bitcoin networks

Stablecoins are seeing significant adoption in emerging markets, where they serve as a tool for individuals to hold US dollar-pegged assets to hedge against local currency volatility. According to Maya Caddle, payments lead at the Solana Foundation, while the US and Europe are in the early stages of domestic utility, emerging markets are already using these digital tokens for real-world functions. Goldman Sachs estimates that approximately 66% of the $290 billion in circulating stablecoins is held by individuals in these regions.

Beyond individual use, businesses are utilizing stablecoins to manage international liquidity. The technology allows companies to avoid the need for large, idle pre-funded positions in volatile local currencies and bypasses the limitations of traditional banking hours.

Simultaneously, technical developments are expanding stablecoin capabilities to the Bitcoin network. Amboss co-founder Jesse Shrader demonstrated stablecoin payments, including USDT and USDC, running over the Lightning Network using the Taproot Assets protocol. This allows digital assets to move quickly and cheaply across Lightning channels while ultimately settling on Bitcoin’s layer one blockchain.