Rising Stablecoin Adoption Drives Educational Initiatives in Emerging Markets
Stablecoin adoption is surging, with these digital assets increasingly strengthening the global dominance of the US dollar. Recent data from DeFiLlama indicates that the total market capitalization of stablecoins has grown to $170 billion, marking a notable 42.86% increase from $119.1 billion last November.
A new report sponsored by Visa, authored by Castle Island Ventures and Brevan Howard Digital, highlights that stablecoins are evolving beyond mere trading tools to become significant monetary instruments, especially in emerging markets. This shift is driven by stablecoins’ role in mitigating currency volatility and enhancing financial efficiency.
Stablecoins’ Impact in Emerging Markets
The adoption of stablecoins is particularly notable in regions with unstable local currencies or limited access to traditional US dollars. According to The Centre For Economics and Business Research, stablecoins are helping to stabilize currency fluctuations and unlock capital by enabling faster, more efficient settlements. These advancements are projected to generate an additional $2.9 billion in economic returns for emerging markets by 2027.
Chris Maurice, CEO and Founder of Yellow Card—a fintech company active in 20 African countries—emphasized the practical benefits of stablecoins. “In Africa, stablecoins are primarily used for international payments, savings, and treasury management,” Maurice stated. He highlighted Nigeria’s rapid crypto adoption, noting that the country, with its 222 million residents and youthful median age, is a global leader in crypto utilization. Between July 2022 and June 2023, Nigeria’s crypto transaction volume grew by 9%, reaching $56.7 billion.
Educational Initiatives for Stablecoin Adoption
With the rising use of stablecoins in emerging markets, new educational initiatives are being launched to facilitate user understanding and adoption. On September 10, Tether (USDT), the largest stablecoin issuer, introduced a learning program aimed at promoting blockchain technology and stablecoin education. The initiative, named “The Valora Learning Program featuring Tether on Celo,” will be rolled out in Nigeria, South Africa, Brazil, Turkey, and Vietnam in collaboration with the mobile digital wallet Valora.
Jackie Bona, CEO of Valora, explained that the program would leverage the Valora app to offer practical demonstrations of stablecoin applications. “Interactive learning modules will allow participants to gain hands-on experience and earn digital asset rewards that can be used immediately for global transactions,” Bona said. The program aims to onboard over 100,000 new Web3 users to the Valora app.
This initiative builds on previous efforts by Tether, which in July partnered with the Vietnam Blockchain Association to educate local stakeholders about stablecoins. Additionally, Yellow Card offers a free online educational platform, “Yellow Card Academy,” which provides resources on blockchain and financial literacy tailored to the African context.
Challenges to Stablecoin Adoption
Despite the progress, challenges remain, particularly concerning infrastructure. Eric Jardine, Cybercrimes Research Lead at Chainalysis, noted that stablecoin adoption is dependent on digital infrastructure, such as internet access and mobile devices. “The availability of digital infrastructure is a crucial factor for stablecoin use,” Jardine said.
In Africa, while stablecoins are aiding businesses in navigating financial systems, rural areas with limited internet connectivity still face barriers. Maurice acknowledged that Yellow Card’s focus on business clients is a strategic approach to overcoming these infrastructure challenges.
Regulatory clarity is another critical factor for stablecoin adoption. Jardine emphasized that clear regulations are essential for ensuring positive adoption outcomes. In response, Nigeria has made strides in establishing regulatory frameworks. The Nigerian SEC recently announced enforcement actions against unregulated market participants and granted licenses to cryptocurrency exchanges Quidax and Busha. Furthermore, five additional firms have been admitted to the SEC’s Regulatory Incubation Program, aimed at testing their business models and technologies.
As stablecoin usage expands, these educational and regulatory efforts will be pivotal in fostering broader adoption and maximizing the benefits of these digital assets in emerging markets.
