Opinion: Morgan Krupetsky, vice president of Onchain Finance at Ava Labs
Immediately following passage of the GENIUS Act, the next era of stablecoin employ will be driven by a growing cohort of fintechs and neobanks – integrating stablecoins into their product and service offerings, going where conventional systems have found it economically or operationally unfeasible, and thereby increasing their competitive advantage.
These competing systems provide a direct way for citizens and businesses to more easily access mobile wallets and store stable value; address financial stability concerns related to hyperinflation and currency volatility; to complete money transfers and other cross-border transactions; gain access to loans and savings; and ultimately to spend money in real time or limit their resources.
This ability to access, earn and spend programmable money has created an order of stablecoin operations – a playbook that has the potential to truly democratize access to finance and enable broad economic inclusion.
Stablecoins enable access
First, stablecoins offer a clear and fundamental benefit in terms of financial access. WITH over a billion adults still excluded from the financial systemprovide uncomplicated and immediate access to the US dollar.
Particularly in the Global South and emerging markets, they represent a stable alternative to a potentially unstable local currency and a reliable store of value.
For businesses and individuals struggling with currency fluctuations, stablecoins have been a game changer. In Argentina, where inflation has exceeded 100 percent annually, diminutive businesses and freelancers are increasingly turning to USDC and USDT to invoice international clients, pay salaries and protect their earnings.
In Latin America alone, stablecoins constitute almost 30% of remittances in some corridors. At the same time, other countries such as Türkiye employ USDT as a hedge against the risk of inflation and currency devaluation.
Fintechs are stepping in to provide US dollar access and, in some cases, banking services to historically underserved individuals and businesses, going where conventional systems found it unfeasible from an economic, operational or technological standpoint.
Possibility to earn money
With an over Stablecoin market capitalization at $265 billionthe “earning” proposal for stablecoins marks the next phase of their evolution. To this end, many of these same fintechs and neobanks are also integrating blockchain-enabled products and services that enable their customers to earn or receive rewards from the stablecoins they hold.
Related: Western Union chooses Solana for its stablecoin and cryptocurrency network
In some cases, cryptocurrency exchanges are integrating DeFi lending/lending platforms directly into their exchanges or non-custodial wallet offerings to allow users to borrow stablecoins and earn a return. In other cases, companies can leverage the growing ecosystem of tokenized money market funds.
This option is a powerful antidote for people struggling with high inflation or with confined access to conventional savings vehicles. In emerging and developing economies where only a quarter of adults employ a savings accountEntities often not served by the existing banking infrastructure can now more easily make money work for them.
In Nigeria Fonbank enables users to convert their earnings into dollar-denominated stablecoins and gain access to onchain savings products that offer yields well above those of local banks. These tools allow users to retain value, earn passive income, and bypass local currency devaluation, all from their mobile phone.
As mobile and global Internet penetration increases, fintechs have the opportunity to not only keep pace with some incumbents, but also surpass them.
When it was time to hang out
The ultimate goal of stablecoins is to become a mainstream medium of exchange, allowing users to transact without having to redirect them to the fiat economy. In this “release” phase they are shifting from a digital asset to a more ubiquitous payment tool.
Platforms are already making this a reality with stablecoin-backed cards, enabling users to make instant, low-cost cross-border payments and everyday purchases by simply paying with a tap wherever Visa is accepted. For emerging and developing markets, this represents an essential way to bypass costly remittance fees, tardy bank transfers and confined access to banking services, fundamentally improving financial inclusion.
Some companies are even incorporating cryptocurrency or stablecoin rewards programs, creating a way to spend on a daily basis to further boost digital adoption and engagement.
From “crypto-casino” to a real-world tool
Ultimately, while global debate and discussion rages around the classification and utility of stablecoins, a novel, effective and inclusive financial system is already being built. Fintechs and neobanks are already demonstrating that stablecoins – through their evolving storage, earning and payment capabilities – are an indispensable element in offering net novel assets and opportunities and expanding global operations.
Stablecoin adoption is a rapidly developing reality, demonstrating the undeniable value of programmable money outside of the cryptocurrency casino.
Already, Stablecoin transfer volume in 2024 exceeded the combined volume of Visa and Mastercard cards. Once viewed primarily as an instrument of speculation or trade liquidity, stablecoins are quickly becoming something much more fundamental: programmable money that can serve as the backbone of responsible digital finance on a global scale.
Opinion: Morgan Krupetsky, vice president of Onchain Finance at Ava Labs.
This article is for general information purposes and is not and should not be treated as legal or investment advice. The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
