Stablecoins to hit $4tn? Three forces seen to fuel boom

Stablecoins are evolving into core financial infrastructure across emerging markets, reshaping money as a whole, a new report by S&P Global Ratings shared with DL News reveals.

Foreign currency stablecoin adoption in these countries will hit $730 billion, up from $70 billion today, according to S&P’s modelling. The firm did not give a specific timeframe for this growth.

“We assume that USD-pegged stablecoins would account for most of that growth, in line with the current trends,” S&P wrote.

In 2025, top developing countries using stablecoins included India, Pakistan, Philippines, Brazil, Indonesia and Vietnam, the firm said. Together, they represent $9 trillion in GDP and over two billion people.

In November, US Treasury Secretary Scott Bessent lifted his forecast for global stablecoin adoption to $3 trillion, raising his earlier $2 trillion bet by 50%.

Investment bank Citi sees even more upside and projects the sector to reach $4 trillion by the end of the decade.

Stablecoins hit a new record at $311 billion on January 17, DefiLlama data shows.

Bessent expects stablecoins to “grow tenfold by the end of the decade thanks to the innovation made possible by the Genius Act.”

To be sure, not everyone is as optimistic about the capabilities stablecoins bring.

Geoffrey Kendrick, head of digital assets research at UK bank Standard Chartered, warned in October that stablecoins risk triggering serious capital drain from banks.

“That makes deposit flight a greater risk in emerging markets than in developed markets,” Kendrick said.

Here are the three forces driving the boom.

Wealth preservation

S&P projects stablecoin holdings to reach up to 20% of all bank deposits in countries with the highest inflation rates show the greatest potential for stablecoin uptake, as households and businesses seek refuge from eroding local currencies.

Currencies in developing countries tend to rapidly lose value. For example, the Iranian rial, has lost roughly 90% of its value in less than a decade.

Dollar-pegged stablecoins offer a digital form of dollarisation that is faster, more accessible, and often perceived as safer than local bank deposits in fragile financial systems, S&P said.

Remittences

Remittances are the second major accelerant.

According to S&P, stablecoins are gaining traction in countries where remittance flows make up a large share of GDP. Traditional cross-border transfers remain expensive, with average global costs still hovering around 6.5%, well above international targets, the firm said.

Meanwhile, stablecoins compress settlement times from days to minutes and strip out layers of correspondent banking fees.

That efficiency is pulling stablecoins deep into everyday financial activity, particularly in economies where remittance inflows are essential to household income and national balance-of-payments stability.

Generational shift

The third force is structural and generational, S&P said.

Emerging markets dominate global digital asset adoption rankings, with 24 of the top 30 countries for crypto and stablecoin usage classified as EMs, according to data cited by S&P from TRM Labs.

In these economies, stablecoins act as the connective tissue between local economies and the global digital financial system.

They facilitate trading, payments, and savings without relying on underdeveloped banking infrastructure.

Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email at [email protected].