Stablecoin Adoption Is Soaring In Emerging Markets: Castle Island Ventures

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

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

Stablecoins: Crypto’s Killer Use Case

In a survey of 2541 crypto users across those 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 sought better currency conversion rates (43%), to earn DeFi yield (44%) and to convert their local currency to dollars (43%).

The stablecoin market is overwhelmingly comprised of USD-pegged crypto tokens, accounting for nearly 99% of the field by market cap. Leading the charge is Tether (USDT), which accounts for 69% of the market alone. Users who favored Tether reported to prefer it for its network effects, user trust, liquidity, and its 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 next to competitors like Solana and Tron. The most popular non-custodial wallets were Trust Wallet, MetaMask, and Coinbase Wallet – though half of the respondents said they used Binance’s centralized exchange as their effective wallet.

Stablecoins are also making headway as a significant slice of their holders’ portfolios. 55% of respondents said such tokens were over 10% of their assets, with 8% saying they comprised 50% of what they own.

“Across all countries surveyed, stablecoin usage was growing over time,” the report said. “A majority of respondents reported growing their usage in the past year, and an even larger share indicated that they would further increase their usage in the coming year.”

Nigeria’s Love For Crypto

Although all countries polled have placed in the top 15 of the Chainalysis crypto adoption, stablecoin adoption was overwhelmingly most pronounced in Nigeria on all measures.

As a portfolio item, Nigerians over 77% held more than 10% of their assets in stables. They also had the highest share of non-crypto trading use cases for stables and the highest self-reported knowledge of such tokens.

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

“Crypto-dollarization events are likely to happen. we believe one such event is actively occurring in Nigeria right now, despite government hostility,” said Nic Carter, General Partner to Castle Island Ventures, over Twitter.

End users want digital dollar instruments, and currency substitution will happen regardless,” he added.