The Price of Stability

A stablecoin is a digital dollar pegged 1:1 to fiat currency. Unlike Bitcoin, its value doesn’t fluctuate. Unlike a bank transfer, it can move instantly, anywhere, at near-zero cost. 

Few financial instruments have scaled this quickly. From a $1B market cap in 2017, stablecoins now exceed $300B with over $1T in average monthly volumes.

Today stablecoins have three primary uses: trading, payments, and savings. 

In the first, they serve as the unit of exchange onchain, what you spend to buy Bitcoin. For cross-border payments, they are faster and cheaper than correspondent banking, especially in corridors underserved by traditional financial infrastructure. And, in high-inflation economies, they offer a flight to quality when governments debase the local currency. 

Recently, the International Monetary Fund released a study on stablecoin utilization. Their data confirmed adoption was not from traders in New York or London. Instead, growth is strongest in countries with high inflation, weak institutions, and failing monetary frameworks. 

The IMF found this concerning, labeling stablecoins a potential systemic risk. The proposed remedy for governments: “maintain effectiveness of capital flow management.” In other words, close the paths for capital and citizens to exit.

But dollar demand isn’t new. Examples punctuate the historical narrative, from Weimar Germany in the 1920s to Latin America's Lost Decade, Argentina's Corralito in 2001, Lebanon in 2019, and Zimbabwe in 2008. 

Historically, the wealthy opted out by moving savings offshore. Today, stablecoins provide that off-ramp to anyone with an internet connection. 

The adoption patterns confirm it.

In Sub-Saharan Africa, adoption grew by 52% in the 12 months ending June 2025. Nigeria accounts for $92B in volume. When the naira devalued sharply in March 2025, volume spiked to $25B while other regions declined. Nigeria’s scale reflects not just its large, digitally native population, but specifically chronic inflation and limited access to foreign currency, both of which have driven adoption of stablecoins as a practical alternative.

This pattern holds in Latin America as well. When the Argentinian peso lost 80% of its value and annual inflation exceeded 140%, the IMF’s own data shows that stablecoin holdings surged as traditional bank deposits began to decline. 

Across APAC, remittances and cross-border payments are driving adoption. India leads, supported by fintech rails like UPI, while Pakistan and the Philippines rank #3 and #4, respectively. 

Where monetary transmission is costly or institutions are weak, the structural demand for dollars emerges. Stablecoins provide all citizens with a simple way to move money and protect their savings.

Consider a typical civil servant in Nigeria earning ₦250,000 (about $150 USD) per month. Between January 2023 and March 2025, the naira depreciated from ₦460 per dollar to over ₦1,500.

Every paycheck, she faced a simple choice: leave her wages in the bank and watch her savings erode, or convert a portion into dollars via USDT and preserve her ability to afford the same life next month.

When your paycheck loses value between earning it and receiving it, the issue isn’t income. It’s preservation. From civil servants in Lagos to hospitality workers in Manila and gig workers in Karachi, stablecoins let people keep more of what they earn. These are not speculators. Instead, they are people responding rationally to monetary systems that are inefficient or failing.

When friction is removed, capital flows towards its highest utility. Stablecoins compress this friction and make a rational choice more accessible. What once required offshore bank accounts, black markets, or intermediaries under state control can now be done with a smartphone.

We accept the IMF’s contention that this compression creates real policy tension. When capital exit is a simple one-tap transaction, banking systems built on captive deposits can become destabilized. These are legitimate concerns. 

But the IMF’s framework treats the exit as the problem, not the symptom. 

For most of modern history, the cost of monetary failure was silently extracted from citizens through inflation and capital controls. While the wealthy opt out, everyone else absorbs the loss. 

Citizens converting savings to USDT or using stablecoins to circumvent excessive correspondent banking fees are responding to a system that extracts value from the people it is supposed to serve. The wealthy have always had options. Stablecoins extend that to everyone.

That is the structural change the IMF's framework has not yet absorbed: stablecoins did not create dollar demand; they democratized access.

For the first time, the cost of bad monetary policy falls on the government that made it, not the citizens forced to hold a depreciating currency.