What the crypto market gives, it can also taketh away. After wowing investors with all-time highs, crypto royalty like Bitcoin and Ethereum have come back down to Earth, retreating into correction territory amid a vibe shift across global markets. But once again, on the ground, the industry’s household names are no longer overshadowing one of the industry’s biggest opportunities — and that’s because it’s unlike any other crypto.

Staying stable: For many Americans (and Westerners), the chaos that comes from investing in cryptocurrency is a feature — not a bug. But for people in less-industrialized economies, investing in stablecoins is a much safer bet. Stablecoins are currencies tied to the value of real-world currencies like the dollar, which is backed by dollar assets like treasuries, commercial paper, and cash and commercial paper. These currencies have become a considerable presence in the digital asset ecosystem. Of the ten largest cryptocurrencies by market cap, two are stablecoins —USDT

andUSDC

, with over $200B in market cap spread between them. One core reason? Because they offer a store of value in an ecosystem drought with volatility.

• A 2024 Chainalysis report said that stablecoins were “supporting real-world use cases in low-income and lower-middle-income countries” across Africa and Latin America.
• The adoption has been particularly robust in countries like Argentina, Brazil, and others suffering from runaway currency inflation, political uncertainty, and a history of financial instability.

Penny for your Coins

Despite the obvious draw for people living in unstable economies, stablecoins have tons of other benefits from a technical standpoint as well — factors that are influencing financial institutions and non-bank businesses to consider launching their own.

• Many of the most popular ones are interoperable, meaning they can be sent across blockchains using centralized exchanges or bridges.
• They can also earn yield on decentralized finance applications, as well as centralized exchanges like Coinbase — which offers 4.1% interest on USDC in many countries.
• Also considered a strong alternative to currency exchange, which generally boasts high fees, stablecoins offer an easier on and off-ramp between FIAT currencies.

Eyes on the dollar: Trump Treasury Secretary Scott Bessent said in recent weeks that stablecoins will help ensure the US dollar remains the global reserve currency. To ensure that, Bessent has urged lawmakers to clear the way for a more lax regulatory regime, not just for crypto but stablecoins as well. The suggestion has led non-bank institutions like RobinhoodHOOD

, PayPalPYPL

, and Revolut to launch their own stablecoins, citing a variety of use cases. Even larger financial institutions like Bank of America ($BAC) have flirted with using the technology. More competition could put pressure on the supremacy ofUSDT

andUSDC

, which have already faced a slate of regulatory challenges over their years-long history.