A recent study by UK-based YouGov found that Nigeria is leading global demand for stablecoins, ahead of countries like India and South Africa. The report, titled “Stablecoin Utility Report” and released on February 17th, followed an online survey of 4,658 adults aged 18+ years across 15 countries. “All respondents either currently hold/held cryptocurrency, including stablecoins, in the last 12 months, or intend to acquire cryptocurrency, including stablecoins, in the next 12 months,” YouGov said, explaining its methodology. The survey was conducted by YouGov, a research and analytics firm, and three crypto firms: BVNK, Artemis, and Coinbase. The study follows previous research that has identified stablecoins as the go-to for crypto trading. Global Index for Stablecoin Demand, according to the Stablecoin Utility Report Earlier reports revealed that stablecoin demand is driven mostly by crypto traders, with retail users accounting for only 6% of use cases. Preference for stablecoins strong in developing economies Stablecoins are fast replacing fiat in developing economies with weak local currencies. The stablecoin Utility Report revealed that almost 80% of Nigerian and South African respondents already held stablecoins. A steep 75% of this demographic plan to increase their holdings in the coming year. For non-holders of stablecoins, the intent to start holding was twice as high in low- and middle-income economies as in high-income ones. In Nigeria, 95% of respondents said they would prefer to receive payments in stablecoins rather than in Naira. This is not a new trend, as stablecoins have long served as a hedge against inflation, which is why they are popular in countries with weak currencies and high inflation. The Nigerian naira is currently exchanging for N1,333 to $1, with the country’s headline inflation stuck at 15.10%, a double-digit figure. Excessive adoption poses global policy concerns Dollar-pegged stablecoins like Tether (USDT) and Circle (USDC) dominate the global stablecoin market, which is currently worth $310 billion. Tether holds the highest market share, with a market capitalisation of approximately $185 billion, followed by Circle, with a market cap of over $75 billion. The market is projected to expand further following favourable regulatory policies, such as the Genius Act. Financial analysts worry that an excessive adoption of dollar-backed stablecoins could raise global policy concerns. Issues such as accelerated dollarisation of economies, increased capital flight, and drained domestic bank deposits could arise if the adoption of stablecoins is not handled strategically. Despite the positive numbers on global stablecoin demand, the survey shows limited acceptance of stablecoins in shops and online marketplaces, which is a significant hurdle to full adoption by retail users. In Africa, stablecoins like USDT and USDC are quite popular amongst Nigerian freelancers. The Nigerian crypto trading community is also a heavy user of stablecoins, expanding its use case and leading a silent onboarding of newbies into the space.
