Stablecoins Drive Financial Inclusion Amid Regulatory Tightening and Rising Transaction Volumes

Stablecoins are increasingly being recognized as a vital tool for promoting financial safety and inclusion in an era of economic uncertainty. Unlike traditional cryptocurrencies such as Bitcoin, stablecoins maintain a stable value by being pegged to fiat currencies or physical assets—most commonly the U.S. dollar—offering the benefits of blockchain technology with the reliability of conventional currency [1]. As global economies face inflation, debt crises, and financial fragmentation, stablecoins are emerging as a promising solution to enhance cross-border transactions, speed up settlements, and ensure transparency through cryptographic mechanisms [1].

In countries with weak financial infrastructure or volatile national currencies, stablecoins serve as a dependable store of value and medium of exchange. For instance, in Argentina and Nigeria, where inflation is a persistent challenge, stablecoins provide an accessible alternative for saving and trading [1]. Even in mature economies, stablecoins are streamlining capital markets by enabling rapid and secure transactions. Chainalysis projects that stablecoin transaction volume will exceed $10 trillion in 2024, a 300% increase compared to 2021 [1].

However, stablecoins are not without risks. Concerns around reserve transparency, technological vulnerabilities, and systemic financial exposure have prompted regulatory action. In early 2025, the U.S. passed the GENIUS Act, mandating reserve disclosure, imposing restrictions on algorithmic stablecoins, and requiring stress testing for stablecoin issuers [1]. Similarly, the European Union updated its Markets in Crypto-Assets (MiCA) regulation to introduce explicit capital and governance requirements for stablecoin operators [1]. These regulatory frameworks aim to reinforce public trust and ensure that the stability of these digital assets is both programmable and verifiable [1].

A growing use case for stablecoins lies in global remittances and humanitarian aid. The World Bank estimates that remittances total $800 billion annually, with an average transfer cost of 6%. Stablecoins have the potential to reduce this cost to less than 1%, providing significant savings for individuals in low- and middle-income countries [1]. During recent crises in Ukraine and Turkey, stablecoins enabled NGOs and diaspora groups to deliver emergency funds with unprecedented speed and transparency, with transactions completing in hours instead of days [1]. The United Nations Development Programme (UNDP) is currently exploring the integration of stablecoins into its humanitarian response systems [1].

Technologically, stablecoins offer inherent advantages. Their transactions are recorded on immutable public ledgers, reducing fraud and enhancing compliance. Smart contracts can automate regulatory triggers and enforce real-time audits. Projects like Ripple’s RLUSD and PayPal’s PYUSD are leveraging third-party oracles and blockchain proofs to improve transparency [1]. Circle, the issuer of USDC, collaborates with licensed custodians to publish monthly reserve attestation reports, reinforcing the credibility of its stablecoin [1]. However, not all stablecoins are created equal. Algorithmic stablecoins, such as TerraUSD, have failed due to flawed designs and lack of safeguards [1].

In conclusion, stablecoins are not merely digital representations of fiat currency but are evolving into digital guarantees of financial safety. They enhance traditional systems by adding automation, transparency, and speed. Yet, their success hinges on a balanced approach between innovation and regulation. If built on foundations of clear legal status, transparent reserves, and robust technology, stablecoins could become one of the safest digital assets available [1]. As noted in a recent International Monetary Fund (IMF) paper, the stablecoins of the future may become the payment rails of today—if designed with the stability of the entire financial system in mind [1].

[1] https://coinmarketcap.com/community/articles/689883e0d2aecc707a2ad7ee/