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The Underground Dollar Boom: Stablecoin Arbitrage in Emerging Markets
Key Insights
- In markets hit by capital controls and double-digit inflation, stablecoins now serve as everyday digital cash reserves, giving households a quick path to dollar stability.
- Official FX caps create 5-15% spreads on CEX P2P desks, turning stablecoin swaps into near-zero cost remittances and small but reliable arbitrage windows.
- With roughly 3.4x deeper order books and 2.8x more fiat pairs than USDC, USDT commands higher premiums and remains the “street dollar” in EMs.
- Fintechs such as Yellow Card, Bitso, and Sphere Labs are entering the market, shrinking once-double-digit spreads to low single digits.
- Sphere Labs’ business-payment volume surged about 20x last year, showing that stablecoins are moving beyond trader-driven P2P trades into regulated, cross-border payments.
Introduction
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Khurshed is an analyst intern at Messari and studies at Vanderbilt University. He previously interned at a crypto hedge fund. His primary interests are Stablecoins, DeFi, and how stablecoins are reshaping cross-border payments in emerging markets.
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