Accessing cryptocurrency remains the primary use case for stablecoins in emerging markets, accounting for 50% of stablecoin use.
However, accessing dollars closely follows at 47%, with generating yield ranking third at 39%.
This is according to a survey of 500 current crypto users from Nigeria, Indonesia, Turkey, Brazil, and India. The survey by YouGuv was commissioned by Brevan Howard Digital and Castle Island Ventures with Visa’s involvement as well.
“While stablecoins initially saw traction as collateral for exchanges and a means of settlement between users and crypto exchanges, we know usage modes have since broadened.
In emerging markets, adoption of stablecoins for payments, currency substitution, and access to high quality forms of yield is accelerating.” says the report.
Across the entire sample, trading cryptocurrency was the most popular goal among stablecoin users, although this varied by country.
- In Turkey, the primary aim was earning a yield, with crypto trading as the second most common goal
- In Indonesia, users prioritized accessing better currency conversion rates, followed by trading crypto and saving money in dollars
- In Nigeria, saving money in dollars ranked first, with crypto trading and securing better conversion rates coming next
The survey also determined that Nigerian users have the highest stablecoin affinity among the countriessurveyed – by far.
SURVEY | SEPTEMBER 2024$USDT continues to dominate the stablecoin market in emerging markets.https://t.co/zWrHkJv5jm @Tether_to pic.twitter.com/sM86OIDg0u
— BitKE (@BitcoinKE) September 16, 2024
Nigerian users transact most frequently, stablecoins compose the largest share of respondent portfolios, they report the highest share of non-crypto-trading uses for stablecoins, and they maintain the highest self-reported knowledge of stablecoins.
If you recall, Nigerian authorities have blamed crypto platforms that enable the exchange of stablecoins for the poor performance of the local currency.
REGULATION | Crypto Exchanges to Stop StableCoin Sales in Nigeria Amid Apparent Crackdown
“There was a meeting of crypto founders on Tuesday [February 27 2024] morning, and a number of them agreed to suspend the trades on their platform,” a person at that meeting told a local… pic.twitter.com/iiYBuYrpOu
— BitKE (@BitcoinKE) February 29, 2024
Other key findings on stablecoin use in emerging markets:
- Stablecoins are preferred to USD banking due to yield, efficiency, and lower likelihood of government interference
- 57 percent of users report an increase in stablecoin usage in the past year, and 72 percent believe that they will increase their stablecoin usage in the future
- In cases where Tether is preferred, the primary reasons reported are its network effects, followed by user trust, liquidity, and its track record relative to other stablecoins
- Of the non-trading use cases, currency conversion (to dollars) is the most frequently reported activity, followed by paying for goods, cross-border payments, and paying or receiving a salary
- Ethereum is the most popular blockchain among sampled users, followed by Binance Smart Chain, Solana, and Tron
- The most popular wallets among respondents are Binance (exchange), followed by Trust wallet, Metamask, Coinbase wallet, crypto.com, and Phantom wallet. There is a long tail of wallets used
The most popular non-custodial wallets were Trust Wallet, MetaMask, and Coinbase Wallet.
“Among all respondents, fully half indicated using Binance exchange as a wallet, more so than any other non-custodial wallet. Notably, 39 percent of Nigerians surveyed acknowledged using Phantom wallet (primarily a Solana client).”
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