TL;DR
- S&P models stablecoin adoption in developing economies at $730 billion, up from $70 billion, while Citi projects a $4 trillion sector by decade’s end.
- S&P says holdings could reach 20% of bank deposits in high-inflation countries, noting the Iranian rial lost 90% of value in less than a decade.
- Remittances and demographics amplify demand: transfers average 6.5% costs, usage concentrates in emerging markets, and warnings say deposit flight could intensify.
Analysts are sketching a future where stablecoins, once plumbing for crypto traders, become mainstream money rails. A new S&P Global Ratings analysis suggests emerging markets could turn foreign-currency stablecoins into core financial infrastructure. Its modeling puts adoption in key developing economies at $730 billion, up from $70 billion today, though it does not specify when that level is reached. Citi projects the broader sector could reach $4 trillion by the end of the decade, as supply hit a record $311 billion on January 17. S&P cited India, Pakistan, the Philippines, Brazil, Indonesia, and Vietnam.
Three forces behind adoption
Inflation, not speculation, is the first tailwind S&P highlights. Stablecoins, the report argues, can function as digital dollarisation when local money is melting down. S&P projects that in the highest inflation countries, stablecoin holdings could climb to as much as 20% of all bank deposits as households and businesses look for a store of value. It points to how quickly some currencies erode, noting the Iranian rial has lost roughly 90% of its value in less than a decade. Dollar-pegged tokens, it says, feel faster and safer than fragile local bank deposits in practice.
Remittances are the second accelerant, and the logic is brutally simple: fees and time. Where cross-border transfers eat into paychecks, stablecoins promise near-instant delivery at lower friction. S&P notes that traditional remittance rails remain expensive, with average global costs around 6.5%, which it says sits well above international targets. Stablecoins, by contrast, can cut settlement from days to minutes and remove layers of correspondent banking charges. That efficiency, the report adds, is pushing stablecoins into daily financial life in economies where inflows support families and external balances, and where speed matters more than branding.
The third force is generational and structural, with emerging markets already leading usage. S&P says stablecoins are becoming connective tissue that links local economies to the global digital financial system. Citing TRM Labs data, it notes that 24 of the top 30 countries for crypto and stablecoin usage are classified as emerging markets, where banking infrastructure can be thin. Policymakers are also leaning in: in November, US Treasury Secretary Scott Bessent raised his forecast to $3 trillion from $2 trillion, a 50% jump. Still, Standard Chartered’s Geoffrey Kendrick warned in October about deposit flight.
