Global Stablecoin Settlements Already At 50% to That of VISA and Mastercard

December 12, 2023 Updated December 13, 2023

By Bhushan Akolkar

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The stablecoin market is advancing pretty fast and making quick inroads into the global settlement industry. A recent report from USDC stablecoin issuer Circle stated that the global settlement value of stablecoins surpassed $7 trillion, which is comparable to the $14 trillion settled by Visa and Mastercard combined.

Demand for Blockchain-based Financial Services

Circle, the issuer of the USDC stablecoin, suggests that blockchain infrastructure is on the verge of handling increased economic activity globally, especially in Latin America. The shift towards blockchain-based financial services is accelerating, with millions of businesses and billions of people expected to turn to regulated blockchain solutions for savings, payments, and credit.

Latin America is playing a leading role in this transformation, with citizens receiving $562 billion in digital currency value from mid-2021 to mid-2022. The growth is due to the value proposition of expanded access, particularly targeting the 1.7 billion underbanked individuals globally who own smartphones. This trend will further disrupt traditional financial processes and bureaucracy.

LatAm Driving Stablecoin Adoption

Latin America is also emerging as a key player in the global adoption of digital currency and financial technology, taking a lead role comparable to North America’s influence on the original internet. The region’s significant population, roughly 658 million, along with a robust developer base of nearly a million, contributes to its growing prominence.

Latin America’s fintech adoption is linked to reduced income inequality, with three-quarters of the 30 million digital bank customers being previously unbanked or underbanked individuals and small/medium enterprises. With strong regulatory support and a doubling of the fintech sector’s size to approximately 2500 platforms, Latin America becomes a natural fit for broader stablecoin adoption.

The region is already witnessing stablecoins entering the purchasing power of consumers. As Central Bank Digital Currencies (CBDCs) gain traction, Circle aims to foster financial interoperability locally and globally by building infrastructure through compliant stablecoins and blockchain-based solutions.

Circle’s Vision As Infrastructure Provider

Circle’s USDC, launched in 2018, has become one of the most liquid and widely held digital currencies globally, with approximately $4 billion in daily transactions. With nearly 2 million users in over 190 countries, USDC is fully reserved, backed 100% by highly liquid assets and redeemable 1:1 for US dollars.

The stablecoin’s reserve includes investments in the Circle Reserve Fund, an SEC-regulated money market fund managed by BlackRock. While most stablecoin activity is currently in dollars, facilitating trade invoicing, Circle anticipates the availability of more non-dollar stablecoins in the future. In 2021, Circle introduced EURC, a euro-backed stablecoin, following the same full-reserve model as USDC.

Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.

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