Stablecoin Adoption Could Reach 20% of Bank Deposits in Emerging Markets

Stablecoins may account for up to 20% of bank deposits in certain emerging market countries, according to a report by S&P Global Ratings. The report analyzed the adoption of foreign currency stablecoins, primarily those pegged to the U.S. dollar, across 45 emerging market nations. According to ChainCatcher, the adoption of stablecoins is driven by three main factors: pressure from local currency depreciation, demand for cross-border remittances, and the widespread use of digital assets. The motivations for adoption, ranked by importance, include wealth protection, remittances, international trade, and enthusiasm for digital assets. S&P Global suggests that countries experiencing high inflation show the greatest potential for stablecoin adoption. In the most aggressive scenario, stablecoins could reach 10-20% of bank deposits in the top 15 countries with the strongest demand for wealth preservation, particularly where local currency purchasing power is declining. In January, blockchain analytics firm Artemis revealed that geographically, India and Argentina are unique cases globally, with USDC accounting for 47.4% and 46.6% of stablecoin usage in these countries, respectively.