Increased adoption of stablecoins in emerging markets highlights cryptocurrency’s ability to accelerate financial development within areas that have typically been underserved. In Sub-Saharan Africa, for example, stablecoins are responsible for around 43% of cryptocurrency transactions, outlining a trend toward more reliable sources of alternative finance.
Increased adoption occurs against a backdrop of global currency devaluations, with unexpected market shocks significantly impacting the financial well-being of individuals in the nations affected. Even in some of Africa’s largest economies, exchange-rate plunges are lowering confidence in national currencies and forcing populations to seek alternatives.
According to Bilal Khaled, director of trading at BitDelta, building technological infrastructure to improve consumer choice in emerging markets will enhance the ease of transacting, bolstering security and prosperity.
“The role of stablecoins varies greatly when considering the financial needs of regions that differ in economic development. For the world’s financial powerhouses, this sector of cryptocurrency represents a dependable investment opportunity, a deregulated source of finance, and even a gateway into more advanced forms of entertainment.
While all these use cases still apply in emerging economies, the key difference is that stablecoins have risen to prominence as a reliable source of alternative finance, capable of solving structural issues that have hindered growth for decades. This is driven by a lack of access to traditional finance, with the unbanked population in areas such as Sub-Saharan Africa far exceeding the volume of people experiencing financial exclusion in more economically stable regions.
To capitalize on this trend and support consumers who would benefit from stablecoin access, bettering provision in two key areas is essential: technological development and education.
Stablecoins cannot accelerate financial inclusion if the individuals that stand to benefit from these funds aren’t equipped to enter the cryptocurrency market. To solve this issue, governments and developers must work together to build exchanges that serve the needs of this specific set of consumers while ensuring they have the necessary technology at hand to view, move, and invest their money.
There’s little purpose in developing the infrastructure for stablecoins if users are unsure how they work. Therefore, we must work to educate consumers, conveying both the benefits of stablecoins and the pathways to leveraging this source of finance. As with any investment, there is an element of risk, so education should also encompass rules for safe trading and a generic set of guidelines for individuals to follow.
In a volatile global market where currency devaluations and financial exclusion severely impact consumer autonomy and security, exploring alternative methods to empower underserved communities is essential. Stablecoins represent a significant opportunity to increase financial development, but this is not possible without the commitment to enabling widespread access from governments, exchanges, and tech developers.”