5 years in the past, SpaceX launched Starlink, which has since grown into its greatest income driver, increasing to over 100 nations. However as Starlink scaled, it confronted a significant hurdle: accepting funds in creating markets, the place conventional banking infrastructure is unreliable, sluggish, 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 extensively utilized in rising markets. The corporate partnered with Bridge, a stablecoin funds platform, to just accept funds in varied currencies and immediately convert them into stablecoins for its world treasury. This transfer positioned Bridge as a viable various to correspondent banks in markets the place conventional monetary programs fall brief. Quickly after, Stripe took discover, buying the startup for greater than $1 billion and solidifying Bridge’s status and driving up its valuation as an infrastructure participant, fixing inefficiencies in world finance.
The rise of stablecoins—now a $205 billion market—is pushed by real-world utility, not hypothesis, notably in rising markets the place probably 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 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 huge transaction quantity development for startups offering stablecoin cross-border options for companies in Africa and rising 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 whole cost quantity thus far.
Investor curiosity has additionally surged, with prime enterprise companies backing stablecoin-powered fintechs focusing 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 main backer of Bridge. Yellow Card raised $33 million, led by Blockchain Capital. Conduit, which raised a $6 million seed spherical final yr, 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 verify in an African stablecoin infra and liquidity supplier, TechCrunch has realized.
The development is obvious: 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 is just not if stablecoins will rework funds however how rapidly they may stand alongside—and even substitute—outdated monetary programs.
Some numbers mirror this shift. In line with a16z, sending $200 from the U.S. to Colombia through stablecoins prices lower than $0.01, in comparison with $12.13 utilizing conventional strategies. Fee platforms are adapting, making a lower albeit a smaller one than the standard middlemen rails. Stripe, for example, now expenses 1.5% for stablecoin transactions, 30% decrease than its commonplace card charges. Companies and people are additionally utilizing stablecoins as a hedge in opposition to inflation and a extra secure retailer of worth, with USDT and USDC turning into essential instruments.
Functions exterior cross-border and remittance
Whereas cross-border funds and remittances have pushed early adoption, stablecoins are actually gaining traction in shopper 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 yr. 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 shopper financial savings, stablecoins are reshaping world 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 Sequence A, fueling its growth 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 instructed TechCrunch.
And whereas retail adoption of stablecoins has been slower, however startups like Cashnote.io are testing options. The platform, developed by Korean fintech Korea Credit score Knowledge and Web3 VC agency Hashed, permits retailers to just 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 belongings for on a regular basis purchases.
Each companies are testing the platform within the Abu Dhabi World 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 belongings infra supplier Fuze appearing because the settlement companion. Fuze raised a $14 million seed in 2023.
But, regardless of stablecoins’ potential to streamline funds globally, issues stay. For one, critics warn that stablecoins may disrupt financial coverage. As they turn out to be extra widespread in world finance, some fear they may mirror previous issues about dollarization, the place economies rely too closely on the U.S. greenback as an alternative of constructing unbiased monetary programs.
Equally, their effectivity comes with trade-offs. In contrast to government-backed currencies, they depend upon personal corporations like Circle and Tether to take care of their worth. These corporations use money reserves, short-term securities, and different monetary belongings to maintain stablecoins pegged to the U.S. greenback. Nonetheless, the 2022 collapse of TerraUSD reveals how susceptible stablecoins may be.
Regulatory shifts may 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 may solely work within the area as a result of 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 instructed TechCrunch. “It has many sandboxes and government support systems for testing innovative and new crypto infrastructure.”
Equally, the UAE made headlines final yr 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 special 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 cell cash, in accordance with Zekarias Amsalu, co-founder of one in all Africa’s prime fintech occasions. He believes regulators, fairly 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 or not their stance modifications or not could depend upon how regulation shapes up within the U.S., which is contemplating new legal guidelines that may have a worldwide influence on stablecoins: A strict regulatory method—although unlikely—may sluggish adoption and impose tighter monetary controls on issuers. Then again, a pro-stablecoin stance may encourage extra nations to create clear licensing guidelines for digital belongings. “These are very strong signals for investors,” Finkelstein mentioned.
