Stablecoin adoption is increasing in emerging markets – Castle Island Ventures

Think stablecoins are just a vehicle for anonymous cryptocurrency trading? A new survey by Castle Island Ventures would suggest otherwise.

In a report sponsored by Visa, the company showed that crypto users in five developing countries (Nigeria, India, Indonesia, Turkey and Brazil) are turning to stablecoins largely as a means of payment and savings technology .

Stablecoins: Crypto’s Killer Use Case

In a survey of 2,541 crypto users from these countries, crypto trading was found to be the most popular use case for stablecoins, applying to 50% of respondents.

However, several other use cases were cited. Saving money in dollars (47%) was the second most popular and was the #1 use case in Nigeria specifically. Others looked for better currency conversion rates (43%), earning DeFi returns (44%) and converting their local currency to dollars (43%).

The stablecoin market is overwhelmingly composed of USD-pegged crypto tokens, which account for nearly 99% of the field by market cap. Leading the charge is Tether (USDT), which only accounts for 69% of the market. Users who favored Tether reported that they preferred it for its network effects, user trust, liquidity, and track record.

While Tether was the most popular stablecoin in these regions, Ethereum was the blockchain most favored by stablecoin users, despite being the most expensive chain alongside competitors like Solana and Tron. The most popular non-custodial wallets were Trust Wallet, MetaMask, and Coinbase Wallet, although half of respondents said they used Binance’s centralized exchange as their effective wallet.

Stablecoins are also moving forward as an important part of their holders’ wallets. 55% of respondents said these tokens were more than 10% of their assets, and 8% said they made up 50% of what they owned.

“In all countries surveyed, the use of stablecoins grew over time,” the report said. “The majority of respondents reported that they increased their use in the past year, and an even greater proportion indicated that they would further increase their use in the coming year.”

Nigeria’s love for cryptography

While every country surveyed ranked in Chainalysis’ top 15 crypto adoption, stablecoin adoption was overwhelmingly highest in Nigeria across all measures.

As a portfolio item, more than 77% of Nigerians had more than 10% of their assets in stables. They also had the highest proportion of non-crypto trading use cases for stables and the highest awareness of these tokens.

Overall, 87% of respondents said they had a favorable opinion of stablecoins.

“Crypto-dollarization events are likely to happen. We believe that one of these events is actively happening in Nigeria right now, despite the government’s hostility.” he said Nic Carter, General Partner at Castle Island Ventures, via Twitter.

End users want digital instruments in dollars and currency replacement will happen regardless,” he added.

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