USDC’s Remarkable Rise in Asia’s Remittance Market

Circle, the issuer of the USDC stablecoin, has observed a significant increase in the use of USDC for remittances across Asia, according to their latest report. The study sheds light on the expanding role of cryptocurrencies in practical financial applications, moving beyond mere speculative trading.

USDC’s Growing Influence in Asia

In 2022, USDC transfers totaling $130 billion entered Asia, marking the region as a major hub for digital currency activity. This influx accounts for 29% of the global digital currency value received, surpassing the figures for North America and Western Europe.

Emerging markets with substantial diaspora communities, like the Philippines, are witnessing increased adoption of USDC for remittance transfers. Circle’s partnership with Philippines-based exchange Coins.ph aims to tap into the country’s significant annual remittance market, valued at approximately $36 billion.

USDC is playing a pivotal role in addressing the $510 billion trade finance gap in the Asia-Pacific region. This gap represents a shortfall in liquidity for cross-border remittances and credit, particularly affecting emerging markets with capital outflow restrictions. Businesses in these regions often face challenges in securing necessary funds for international trade.

Taipei-based XREX exemplifies the practical use of USDC in bridging liquidity gaps. The company utilizes stablecoins to create financial conduits between nations, leveraging Taiwan’s robust dollar liquidity to alleviate dollar shortages in other Southeast Asian countries.

Contrasting with the growing utility in practical financial scenarios, the report indicates a 90% decline in stablecoins’ use for speculative trading over the past five years.

Stablecoin Adoption in Latin America:

The report also highlights the growing acceptance of stablecoins in Latin America, where 33% of consumers have used a stablecoin for payments. The region recorded digital currency receipts of $562 billion between 2021 and mid-2022.

Circle’s report underscores the evolving landscape of cryptocurrency use, particularly the USDC stablecoin, in Asia’s remittance and trade finance sectors. This trend signifies a shift from speculative trading to more substantive financial applications, demonstrating the potential of stablecoins to transform cross-border transactions and economic activities in emerging markets.