Author: Morgan Krupetsky, Vice President of On-Chain Finance at Ava Labs
With the passage of the GENIUS Act, the next phase of stablecoin usage is being driven by an expanding group of fintech companies and new banks—integrating stablecoins into their products and services, venturing into areas that traditional systems find difficult to access due to economic or operational reasons, thereby enhancing their competitive advantage.
These challenger systems provide individuals and businesses with a more direct way to access and store stable value through mobile wallets, addressing financial stability risks posed by hyperinflation and currency fluctuations, facilitating remittances and other cross-border transactions, providing credit and savings channels, and ultimately enabling real-time consumption or collateralization of their held assets.
This ability to acquire, earn, and spend programmable money has given rise to a "stablecoin operating procedure"—a manual that promises to truly democratize finance and promote widespread economic inclusion.
First, from the perspective of financial access, stablecoins bring clear and fundamental benefits. Currently, over 1 billion adults worldwide remain excluded from the financial system, and stablecoins provide them with a convenient, instant new entry point to access US dollars.
Especially in the Global South and emerging market countries, stablecoins have become a robust alternative to potentially volatile local currencies and a reliable store of value.
For businesses and individuals facing currency volatility, stablecoins are changing the game. In Argentina, where the annual inflation rate has exceeded 100%, small businesses and freelancers are increasingly opting to use USDC and USDT to invoice international clients, pay salaries, and safeguard their income.
In Latin America alone, stablecoins account for nearly 30% of remittance flows in certain corridors. Additionally, countries like Turkey are using USDT as a crucial means to hedge against inflation and the depreciation of their national currency.
Fintech companies are stepping in to provide dollar access channels for historically underserved populations and businesses, sometimes even offering banking services—areas that traditional systems struggle to cover due to economic, operational, or technical reasons.
The global market capitalization of stablecoins has now surpassed $265 billion, and "earning" yields has become a new phase of their development. Consequently, many similar fintech companies and new banks are integrating blockchain-driven products and services, allowing users to earn yields or receive rewards by holding stablecoins.
In some cases, cryptocurrency exchanges are directly integrating decentralized finance (DeFi) lending platforms into their exchanges or non-custodial wallet products, enabling users to lend their stablecoins and earn returns. In other scenarios, companies can leverage the growing ecosystem of tokenized currency funds for investment management.
This capability provides a powerful remedy for those suffering from high inflation or struggling to access traditional savings channels. In emerging and developing economies, only a quarter of adults have savings accounts, while those long overlooked by traditional banking infrastructure can now more easily put their funds to work and achieve wealth appreciation.
In Nigeria, Fonbank allows users to convert their income into dollar-denominated stablecoins and access on-chain high-yield savings products, with returns far exceeding local bank rates. These tools help users preserve value and increase income, achieving passive income while bypassing the effects of local currency depreciation through their mobile phones.
As mobile device penetration and global internet access continue to rise, fintech companies are not only keeping pace but also have the opportunity to leapfrog over some existing institutions.
For stablecoins, the ultimate goal is to become a primary medium of exchange, allowing users to complete various transactions without needing to convert back to fiat currency. In this "consumption" phase, they transition from digital assets to more universally applicable payment tools.
Currently, platforms have launched stablecoin-supported debit cards, enabling users to make low-cost cross-border payments and everyday purchases with just a tap, usable at any merchant that supports Visa. In emerging and developing countries, this method effectively avoids high remittance fees, slow bank transfers, and limited banking services, fundamentally improving financial inclusion levels.
Some companies even layer cryptocurrency or stablecoin reward programs on top, further driving digital adoption and user engagement in everyday spending.
Ultimately, as the global debate over the classification and use of stablecoins continues, a new, efficient, and inclusive financial system has quietly taken shape. It has been proven that through the evolving functionalities of wallet storage, yield generation, and payment capabilities, fintech companies and new banks are seizing new assets and capabilities that were previously unavailable, helping to expand their businesses to new heights globally.
Today, the adoption of stablecoins has become a rapidly developing reality, with programmable money demonstrating its practical application value in the real world.
In 2024 alone, the total volume of stablecoin transfers has already surpassed the combined total of Visa and Mastercard. Once primarily viewed as speculative tools or liquidity vehicles, stablecoins are now rapidly evolving into a more fundamental presence: a programmable currency that is poised to become one of the core pillars of a responsible, large-scale digital financial system.
Author: Morgan Krupetsky, Vice President of On-Chain Finance at Ava Labs.
Related: Reports indicate that a Nordic bank that once rejected cryptocurrency is about to launch a Bitcoin (BTC) ETP.
Original: “Opinion: Fintechs and New Banks Drive Stablecoin Adoption into a New Era”
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