- The Asia-Pacific region makes up almost a third of digital currency value worldwide
- Circle's stablecoin is helping close the region’s trade finance gap of $510 billion
Circle, the issuer of the stablecoin USDC, reported on a surge in remittances through Asia via the stablecoin. It drew attention to the fact that crypto can be used for more than speculative trading, CoinDesk wrote, citing the report. USDC is a stablecoin backed by the US dollar as well as by liquid cash and cash-equivalent assets.
Asia Pacific holds the lion’s share of digital currency
According to Circle, the Asia-Pacific region makes up almost a third of the digital currency value worldwide. Western Europe accounts for 22%, and North America - 19%. Remittance transfers also make up these volumes, and they are critical for developing countries with a large diaspora, of which the Philippines are an example.
Circle wrote about its partnership with Coins.ph, a Filipino exchange, which they negotiated in an effort to attract some of this business. It is worth around $36 billion per annum.
Helping close the trade finance gap
According to Circle, its stablecoin is playing a role in closing the region’s trade finance gap, which amounts to $510 billion. This gap represents the absence of liquidity that companies need for credit and cross-border remittances. It is especially damaging in emerging markets with limited capital outflow, as companies can struggle to find the money they need for international trade.
XREX, a company based in Taipei, is using USDC to help bridge this gap. According to its founder, the company is developing connections between countries using stablecoins by availing itself of the insufficient dollar supply in Southeast Asia and the high dollar liquidity in Taiwan.
90% drop in speculative stablecoin use
Every third consumer in Latin America has made a payment with a stablecoin. Citizens in the region got digital currency worth $562 billion from 2021 to mid-2022. Circle added that worldwide use of stablecoins in speculative trading has dropped by 90% over the last five years.
Contributors
