Messari: Underground Dollar Booms Stablecoin Arbitrage in Emerging Markets

Author: Khurshed Murtazaqulov, Intern Analyst at Messari; Translator: Jinse Finance xiaozou

I recently wrote a professional report for Messari, and I would like to summarize its key points below.

Stablecoins are rapidly expanding in emerging markets.

What phenomenon is most overlooked and neglected in public? Probably the carry trade. Let's examine its importance and why it's not necessarily a bad thing for emerging markets. Initially, cryptocurrency trading took place peer-to-peer (P2P) through forums like BitcoinTalk and LocalBitcoins. Today, P2P marketplaces like Binance and Bybit have replaced these platforms, while fintech companies continue to expand into emerging markets. In many emerging economies, the P2P marketplaces of centralized exchanges (CEXs) have become the primary channel for fiat deposits and withdrawals. Peer-to-peer exchange mechanisms in emerging markets allow users to exchange USDT for more local currencies, naturally generating demand from remittance providers and arbitrage traders. The price gap exists because exchange rates on centralized exchanges (CEXs) are market-determined, uncontrolled by governments, and largely unregulated. For example, Russian freelancers can currently receive 7% more rubles through Bybit's P2P marketplace than through banks. Faster, lower-cost remittance methods create natural demand and offer better exchange rates. The P2P market on centralized exchanges plays a crucial role in the exchange of stablecoins and fiat currencies. Binance leads the P2P market with 119 fiat currency trading pairs. In the past 24 hours alone, the combined trading volume of the three major exchanges (Binance, Bybit, and OKX) exceeded $500 million.