The adoption of cryptocurrencies and stablecoins has exploded in many emerging markets around the world. Stablecoins have been widely adopted by consumers in emerging markets due to their convenience and practicality, and are becoming an ideal payment medium for cross-border trade. In this regard, blockchain payment platform Orbital recently published a blog detailing the current market situation to provide reference for its customers and more companies considering integrating cryptocurrency payments.
Blockchain payments in developed markets
In developed countries such as North America and Europe, consumers generally use traditional payment methods such as Visa, MasterCard, bank transfers, and local payment solutions. From a user experience perspective, these methods work efficiently and merchants can access them at any time. Therefore, consumers or merchants in these regions are less motivated to adopt cryptocurrency payments. In addition, most users in developed countries view cryptocurrency as a speculative investment rather than a payment tool, which further reduces their willingness to use cryptocurrency payments. Moreover, payment with cryptocurrency is generally regarded as an asset disposal and may need to be recorded as a capital gains event, which also weakens its attractiveness as a payment tool.
Stablecoin adoption in emerging markets
In contrast, the situation is quite different in emerging markets such as Africa, Asia and Latin America. Major payment networks such as Visa and Mastercard have very low penetration in these regions. In the past, global merchants who wanted to sell goods in an emerging market had to use different local wallet networks and alternative payment methods in each target country. This process was time-consuming and labor-intensive, and also brought challenges to funds and cross-border liquidity.
Then, blockchain quickly emerged as a disruptive alternative payment method. In recent years, cryptocurrencies and stablecoins have rapidly gained popularity in many emerging markets around the world, including Nigeria, Turkey, Argentina, India, Vietnam, Brazil, etc. Consumers quickly realized that stablecoins provide digital dollars that can be held and traded without a bank account. As the global reserve currency, the dollar is as attractive as ever. In emerging markets, consumers have long been eager to hold US dollars, but in the past they could only hold them in the form of paper bills. Local currencies in these regions are often at risk of rapid depreciation and have very low value in international markets, so the US dollar can be used as a tool to hedge local currency risks. Blockchain-based US dollars (stablecoins) have been widely adopted by consumers due to their convenient and practical characteristics, with a penetration rate of 20%-50% in many emerging markets, making them an ideal payment medium for cross-border trade.
The top ten countries in the Chainalysis 2023 Global Cryptocurrency Popularity Index are:
The 2023 Cryptocurrency Popularity Index shows that among the top ten countries, 7 are lower-middle-income countries as defined by the World Bank, and 9 are emerging market countries.
USDT transactions on the TRON chain
As the world's largest stablecoin issuer, Tether (USDT) has a market value of $112 billion and occupies more than 75% of the stablecoin market share. Among them, more than 50% of USDT is issued on the TRON network.
Currently, TRON leads in USDT trading volume, reflecting the growing popularity and demand for the network as a payment method. The platform is scalable and cost-effective, attracting more and more businesses and users. According to Allium, 38.6% of all stablecoin addresses used in the past 30 days are USDT addresses in TRON wallets.
Monthly active stablecoin users:
Advantages for Merchants
The benefits that the TRON network brings to merchants are obvious: it provides a unified payment method, covers almost all emerging markets in the world, and reaches a large number of consumers; at the same time, it can achieve instant settlement, no chargebacks, and transaction fees can be reduced by 80%.
These factors have combined to drive a rapid growth in the TRON network’s adoption among consumers in emerging markets and international merchants targeting emerging markets. We understand that blockchain payments are of little value to consumers in developed countries, and our clients want to focus on emerging markets. As a result, we estimate that more than 99% of transactions on the Orbital platform come from emerging markets.
Choosing the right blockchain and token
To understand which blockchains and tokens are suitable for Orbital customers, we analyzed hundreds of thousands of transactions on the platform in the last quarter and found that users in emerging markets have a very clear preference for blockchain. The following are the main results of the data analysis:
98% of stablecoin transactions on the Orbital platform are conducted on the Tron chain.
USDT transactions issued by Tether account for 99% of the platform's total stablecoin trading volume.
In overall cryptocurrency trading, the Tron version of USDT accounts for 96% of the total trading volume.
In terms of the type of wallet used by end users, 75% of users trade through cryptocurrency exchanges, while 24% use self-hosted wallets.
Of these, 95% of transactions conducted through exchanges and 89% of transactions conducted through self-hosted wallets are processed by the TRON network.
In summary, data analysis in all dimensions shows that users in emerging markets clearly prefer TRON version of USDT. We strongly recommend that all merchants and international companies provide TRON version of USDT payment options for users in all emerging markets around the world to accurately meet the needs of consumers in emerging countries.
As the blockchain payment market continues to expand in emerging economies, understanding the above trends and adopting corresponding strategies are key for companies to enter these markets.
Original link:
www.linkedin.com/pulse/importance-usdt-payments-tron-emerging-markets-orbital-finance-x 8 ycf