Stablecoins are increasingly recognized for their potential to revolutionize global commerce. However, they currently represent just 0.2% of e-commerce transactions, according to a report published by Quinlan & Associates and IDA on Nov. 27. The study highlights the scarcity of non-USD stablecoins as a significant obstacle to broader adoption.
Stablecoins’ Untapped Potential
Current Usage
Cryptocurrencies, including stablecoins, contribute a mere 0.2% to global e-commerce transaction value.
Stablecoins like Tether (USDt) and USD Coin (USDC) dominate the $200 billion market cap but are overwhelmingly pegged to the U.S. dollar.
Barriers to Adoption
Regulatory Uncertainty: Over 81% of merchants cite unclear regulations as a barrier to accepting stablecoins for payments.
Lack of Non-USD Options: With 83% of countries not using USD as their primary or secondary currency, there’s a growing demand for stablecoins pegged to other currencies.
The Case for Non-USD Stablecoins
Market Gap
Approximately 40% of global payments are conducted in non-USD currencies, highlighting the need for alternative stablecoins.
IDA plans to launch a stablecoin pegged to the Hong Kong dollar to facilitate cross-border payments between Hong Kong and global markets.
Benefits of Stablecoins
According to IDA co-founder Lawrence Chu, stablecoins offer:
Cost efficiency and 24/7 availability.
Enhanced transparency and programmability over traditional financial systems.
Growing Demand and Regulation (H2)
Impact on US Treasury Bonds
The U.S. Treasury Department reports that stablecoins backed by Treasury bills have modestly increased demand for short-term government securities.
Legislative Outlook
Former Senator Pat Toomey suggests that stablecoin regulations could advance by 2025, focusing on reserve requirements and jurisdictional clarity.
Key legislation includes Senator Bill Hagerty’s Clarity for Payment Stablecoins Act, which aims to address regulatory challenges.
Conclusion: Unlocking Stablecoin Potential with Non-USD Options
The report underscores the untapped potential of stablecoins in global commerce, emphasizing the need for diversification beyond USD-backed options. As regulatory clarity improves and alternative stablecoins emerge, the adoption of digital assets in mainstream payments may accelerate, reshaping the global financial landscape.
