The Stablecoin Leapfrog: How Emerging Markets are Bypassing Traditional Banking

Key Insights

• Emerging markets are rapidly adopting stablecoins to bypass traditional banking systems, driven by user-friendly applications and limited banking infrastructure.
• Sub-Saharan Africa, Latin America, and Eastern Europe are experiencing the highest increases in crypto activity, significantly enhancing financial inclusion and reducing transaction costs.
• Tron's strategic partnership with Binance and its low-fee, high-speed network have established it as a dominant platform for USDT transfers in emerging markets.
• Crypto platforms like Bitso, Yellow Card, and Kuna are crucial in facilitating stablecoin transfers, international remittances, and value storage across major EMs.

Just as Emerging Markets (EM) once skipped desktop computers and moved directly to mobile devices, they are now poised to bypass traditional banking and payment systems in favor of stablecoins. While mobile leapfrogging was driven by affordable smartphones and expensive broadband infrastructure, stablecoin adoption will be fueled by easy-to-use apps and limited banking infrastructure. By embracing crypto infrastructure, regions like Africa, Latin America, and Eastern Europe can enhance financial inclusion, streamline cross-border payments, and significantly reduce costs.

In this report, we will explore evidence of retail stablecoin usage onchain, the close connections between this usage and centralized finance (CeFi), the companies driving the stablecoin movement, and who will benefit most from continued adoption.