Standard Chartered calls stablecoins crypto’s first ‘killer app’

According to a Standard Chartered report, stablecoins are shifting from initial use in crypto exchanges to broader applications in global finance.

The study indicates that stablecoins are increasingly used for purposes akin to traditional finance, such as saving and transacting in U.S. dollars and facilitating cross-border payments.

Standard Chartered comments on how stablecoins’ dominant use case is evolving.

“There is growing evidence of increasing stablecoin use for a variety of purposes akin to those provided in traditional finance.”

According to the report, one significant factor driving this shift is the demand for faster and more accessible cross-border transactions. Traditional correspondent banking systems have limitations, especially in emerging markets with declining access.

Stablecoins offer a solution by enabling the transfer of digital dollar assets at speeds comparable to email, bypassing the slow and sometimes unreliable traditional systems.

The report highlights that stablecoins are now being adopted for saving in USD terms, transacting in USD, and cross-border USD-to-USD transactions.

A survey cited in the study found that in countries like Brazil, Turkey, Nigeria, India, and Indonesia, 69% of respondents use stablecoins for currency substitution, 39% for paying for goods and services, and another 39% for cross-border payments.

While U.S. dollar-pegged stablecoins dominate the market, accounting for 99.3% of the market capitalization, there’s a growing interest in non-USD stablecoins.

The emergence of stablecoins linked to other national currencies, such as the Turkish lira, indicates a potential shift towards more diverse offerings in the stablecoin ecosystem.

The report also notes that the stablecoin market cap is currently $163 billion, which is small compared to the overall financial markets but has significant room for growth.

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