Stablecoins have become increasingly popular in recent years, and their scope of application is also expanding, according to a new joint study conducted by Castle Island Ventures, Brevan Howard, Artemis, and Visa Crypto. Overall, the most common use cases for stablecoins outside of trading include currency conversion, payment for goods, money transfers, and paying or receiving salaries.

Let us recall that stablecoins are digital assets that maintain a stable price by linking to traditional assets such as fiat currencies or commodities such as gold. There are several types of stablecoins: those backed by currency and crypto, as well as algorithmic ones, where the mechanism for regulating the supply of coins is responsible for stability.

According to some analysts, stablecoins are perhaps the most successful tool for attracting new users to crypto. For example, for residents of countries with economic problems, they provide access to the dollar, which is sometimes not so easy to buy. And this, in turn, allows you to save your earned money, rather than wait for it to gradually depreciate due to inflation.

Another important scenario for using stablecoins is to protect your funds from confiscation by governments, banks, and other centralized organizations. However, it is much more difficult for authorities to get to crypto assets, especially if they are stored outside of exchanges using hardware wallets.

Why do we need stablecoins?

The study’s leaders found that of the $2.6 trillion that has been transacted in stablecoins this year, much of it has real-world uses.

The survey was conducted between May 29 and June 13, 2024, via YouGov. It involved 500 adults who self-reported their interactions with cryptocurrencies in each emerging market country. As we noted, the latter included Brazil, Nigeria, Turkey, Indonesia, and India.

The analysts noted that with stablecoins currently in circulation at around $170 billion, these often dollar-denominated tokens are “clearly one of the best uses” of cryptocurrencies. Overall, the study’s authors put forward a conservative estimate that around $3.7 trillion will be moved using stablecoins in 2023.