The Global South's New Financial Backbone: How Stablecoins Are Reshaping Trade and Trust

Stablecoins are increasingly serving as a critical financial infrastructure for the Global South, particularly in regions where traditional banking systems remain underdeveloped or unstable. These digital assets, designed to maintain a stable value relative to fiat currencies like the U.S. dollar, are being adopted by businesses in emerging markets to hedge against local currency devaluation and unreliable liquidity. Yellow Card, a leading stablecoin infrastructure provider, has reported that stablecoin adoption in emerging markets is driven by practical necessity rather than speculative hype. According to the firm’s latest report, stablecoin transactions surpassed $15.6 trillion in value in 2024, with Central and Southern Asia, Africa, and Latin America dominating the Chainalysis Global Crypto Adoption Index. In Argentina, for instance, 61.8% of all crypto transactions involved stablecoins, a direct response to the country’s soaring inflation rates [4].

Stablecoin adoption is particularly pronounced in Sub-Saharan Africa, where 43% of total crypto transaction volume now consists of stablecoins. Nigeria alone processed nearly $22 billion in stablecoin transactions between July 2023 and June 2024. Yellow Card’s business is predominantly stablecoin-based, with top use cases including cross-border trade, treasury management, and business payments. The firm attributes this trend to the growing availability of mobile internet and the inherent advantages of stablecoins—such as low transaction costs, fast settlement, and borderless utility—which allow users to bypass inefficient legacy systems [4].

The rapid growth of stablecoins is further supported by regulatory developments such as the U.S. Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, signed into law by President Donald Trump in July 2025. The act provides a federal regulatory framework for the issuance of dollar-pegged stablecoins, setting the stage for broader adoption by both domestic and international participants. While the act is primarily focused on U.S. jurisdiction, it inadvertently opens opportunities for foreign fintech firms to expand into the global stablecoin market. Chinese companies, in particular, are leveraging regulatory clarity in jurisdictions like Hong Kong and Singapore to issue U.S. dollar-backed stablecoins, thereby expanding their influence in the Global South [5].

The integration of stablecoins into mainstream commerce is being facilitated by platforms like Stripe and its newly acquired subsidiary, Bridge. Bridge aims to make stablecoins an “invisible” but powerful settlement layer for global commerce, treating them as infrastructure rather than a speculative asset. By embedding compliance mechanisms such as anti-money laundering (AML) and know-your-customer (KYC) protocols into its platform, Bridge is helping enterprises and financial institutions adopt stablecoins without stepping into regulatory gray areas. This approach has already proven successful, with Stripe processing stablecoin transactions from over 70 countries within one week of enabling the feature [6].

Bridge’s collaboration with Visa is further demonstrating the potential of stablecoins in everyday spending. By linking stablecoin balances to Visa-backed cards, consumers can now spend their digital assets at any merchant in the Visa network. This model not only enhances global accessibility but also improves the efficiency of cross-border transactions, which traditionally suffer from high fees and lengthy processing times. In regions with fragmented banking access, such as Latin America, this innovation is particularly impactful, as it allows consumers to use stablecoins in a familiar and compliant manner [6].

However, the growing reliance on stablecoins is not without risks. One of the most pressing concerns is the potential for systemic instability in the event of a “run” on stablecoins, where a large group of investors redeem their holdings simultaneously. This risk was starkly illustrated by the collapse of TerraUSD in 2022, which highlighted the volatility that can occur in the 24/7 trading environment of stablecoins. Additionally, stablecoins face challenges in meeting key tests for money, such as singleness (consistency in value), elasticity (capacity to expand with demand), and integrity (compliance with KYC standards). These issues have raised concerns among regulators and central banks, including the Bank for International Settlements, about the long-term stability and governance of the stablecoin ecosystem [2].

Despite these risks, the outlook for the stablecoin market remains optimistic. J.P. Morgan Global Research projects that the stablecoin market could grow to $500–750 billion in the coming years, driven by expanding use cases and infrastructure development. While some forecasts suggest a more aggressive $2 trillion market by 2028, J.P. Morgan considers this figure optimistic and bases its projection on a more conservative growth trajectory. The firm attributes this cautious stance to the nascent nature of the stablecoin ecosystem and the time required to build out new infrastructure, as well as the hesitancy of more conservative liquidity investors to adopt stablecoins as a cash alternative [2].

As stablecoins continue to evolve, their role in the global financial system is becoming increasingly complex. While they offer transformative potential for financial inclusion and efficiency, they also pose significant risks that require careful management. The coming years will likely see a continued push from both regulatory bodies and market participants to strike a balance between innovation and stability, ensuring that the benefits of stablecoins are realized without compromising financial integrity.

Source:

[1] Stablecoin Has Arrived. Is The Payments Revolution ... (https://www.investors.com/news/stablecoin-genius-act-payments-revolution/)

[2] What to Know About Stablecoins (https://www.jpmorgan.com/insights/global-research/currencies/stablecoins)

[3] Swap USDC to USDT at the best rate (https://1inch.io/tokens/exchange-usdc-usdt/)

[4] Yellow Card expands into emerging markets as stablecoin ... (https://www.intelligentcio.com/africa/2025/09/04/yellow-card-expands-into-emerging-markets-as-stablecoin-adoption-surges/)

[5] Beijing rides US stablecoin wave to global shores (https://eastasiaforum.org/2025/09/04/beijing-rides-us-stablecoin-wave-to-global-shores/)

[6] Bridge and the rise of invisible stablecoin payments (https://www.theasianbanker.com/updates-and-articles/bridge-and-the-rise-of-invisible-stablecoin-payments)