Circle’s USDC stablecoin revolutionizes remittance flows across Asia

In a significant shift in the use of cryptocurrencies beyond speculative trading, Circle’s USDC stablecoin has experienced a substantial increase in remittance flows across Asia. A new report from Circle reveals that in 2022 alone, transactions totaling $130 billion in USDC were directed into Asia. This surge highlights the growing role of digital currencies in facilitating cross-border financial activities, especially in regions with substantial diaspora populations.

USDC, pegged to the U.S. dollar and backed by cash and cash-equivalent assets, has become a key player in the digital currency space. With the Asia-Pacific region accounting for 29% of the global digital currency value received, it surpasses the 19% and 22% shares of North America and Western Europe, respectively. This trend is particularly notable in emerging markets like the Philippines, where remittances are a critical component of the economy. Circle’s partnership with Coins.ph, a prominent exchange in the Philippines, underscores the strategic focus on capturing a portion of the country’s annual remittance market, estimated to be around $36 billion.

Bridging the trade finance gap

The report further highlights USDC’s role in addressing the region’s $510 billion trade finance gap. This gap, characterized by a lack of liquidity for cross-border remittances and credit, is particularly acute in emerging markets with capital outflow restrictions. Businesses in these regions often face challenges in securing necessary funding for international trade activities.

Taipei-based company XREX exemplifies the application of USDC in bridging this gap. As reported by CoinDesk in 2022, XREX, under the leadership of founder Wayne Huang, leverages stablecoins to construct financial conduits between nations. The company’s strategy capitalizes on Taiwan’s robust dollar liquidity and the dollar shortages in other Southeast Asian countries.

Changing landscape of stablecoin usage

The report also sheds light on the evolving landscape of stablecoin use. Over the past five years, the use of stablecoins like USDC in speculative trading has plummeted by 90%. This shift signifies a broader transition towards more practical and diverse applications of digital currencies. Additionally, the report notes the growing adoption of stablecoins in Latin America, where 33% of consumers have used a stablecoin for payments. Between 2021 and mid-2022, Latin American citizens received $562 billion in digital currency, further evidencing the expanding global footprint of stablecoins.

In conclusion, Circle’s report on USDC underscores the stablecoin’s increasing importance in remittances and trade finance, particularly in the Asia-Pacific region. This trend reflects a maturing cryptocurrency landscape, where digital currencies are finding more practical and impactful applications beyond mere speculative trading.

The post Circle’s USDC stablecoin revolutionizes remittance flows across Asia first appeared on Coinfea.