Colombians Turn to Stablecoins as Peso Crumbles and Banks Fail to Keep Pace

MoneyGram International Inc. has announced a pilot program that may allow Colombian users to hold their funds in USDC, a stablecoin pegged to the U.S. dollar, as the Colombian peso continues to weaken against the greenback. The feature, which is currently being tested, could provide users with a more stable alternative to the volatile local currency, particularly in a market where dollarization trends are growing.

The peso has lost nearly 12% of its value against the U.S. dollar over the past six months, prompting an increased demand for digital alternatives to traditional bank accounts. According to data from the Colombian Superintendence of Financial Institutions, the use of stablecoins in the country has grown by 35% year-to-date, with USDT remaining the most widely adopted option.

While USDC is not yet available for direct use within the MoneyGram app, the company has indicated that it is exploring partnerships with local financial institutions to facilitate the integration of the stablecoin as a holding option for transactions. This move comes as part of a broader strategy to expand its digital wallet functionality and appeal to a growing segment of users who seek to protect their savings from inflation and currency devaluation.

Despite the potential introduction of USDC, USDT continues to dominate the market, with over 70% of stablecoin transactions in Colombia involving Tether’s token. Experts suggest that the dominance of USDT is due in part to its widespread adoption, ease of use, and lower transaction costs compared to other stablecoins.

Analysts note that the move by MoneyGram signals a growing acceptance of digital assets in emerging markets, where traditional banking systems are often constrained by regulatory hurdles and high transaction costs. However, the regulatory environment in Colombia remains cautious, with the central bank and financial authorities closely monitoring the use of stablecoins to ensure compliance with anti-money laundering and financial stability requirements.

If the pilot program proves successful, MoneyGram could roll out the feature to a broader audience, potentially reshaping the way Colombians manage their international transfers and savings. For now, users remain primarily reliant on traditional remittance services and digital alternatives such as USDT to hedge against local currency fluctuations.