Stablecoins. Reliable, quietly transformative, and suddenly everywhere. Jeremy Allaire, the founder of Circle, calls them the “highest utility form of money ever created,” and the numbers seem to agree. Ethereum alone settled over five trillion dollars in stablecoin transfers in the second quarter of 2025, according to Milk Road, exceeding the combined transaction volume of Visa and Mastercard during the same period.
And as their volume has grown, so has their reach. Stablecoins have moved beyond crypto exchanges to power payments, remittances, and digital cash across borders. They now help freelancers get paid, NGOs deliver aid, communities access money where banks fall short, and even small businesses trade across borders without relying on volatile local currencies.
Stablecoins have turned from a niche market tool into one of the most practical and widely used applications of web3, a proof that the technology’s real value lies in usefulness, not speculation.
From Latin America to Africa, the impact is already visible. In Argentina, stablecoins protect household savings from a currency that has lost over 200% of its value in a year. In Venezuela, they offer a practical way to store and move money as inflation and sanctions erode trust in the bolívar. And in Nigeria, they underpin most peer-to-peer transfers, helping freelancers and traders move funds globally without banks. Rather than an abstract tool, stablecoins have become part of the everyday economy.
This guide explores how stablecoins came to fill that role, tracing their origins, mechanics, and growing influence across markets and humanitarian work.
Stablecoins are digital tokens designed to hold a steady price, usually by linking their value to another asset such as a national currency or collateral.
The idea of creating price-pegged digital money dates back to 2014. That year, a project called BitUSD launched on the BitShares blockchain as the first cryptocurrency designed to track the value of the US dollar using crypto collateral. While the experiment itself was short-lived, it showed that a blockchain could issue assets designed to maintain a stable value relative to another currency—using collateral and code.
Meanwhile, another project took the idea in a different direction. Tether (originally known as Realcoin) launched with a one-to-one peg to the US dollar, backed by reserves held by the issuer. It became the first fiat-backed stablecoin and quickly established itself as the main unit of account across exchanges. Naturally, this was a key unlock for traders, who until then had no reliable way to transact in crypto without prices shifting day to day.
And with time, more versions emerged. In 2017, MakerDAO launched DAI, a decentralized stablecoin backed by crypto collateral and kept close to one dollar through self-regulating smart contracts. Everything operated transparently onchain, where anyone could see the reserves, follow the system, and understand how stability was maintained. Even though the model has evolved since then, for many early builders, DAI captured the spirit of what Web3 could become: money governed by code and community, not a middleman.
In 2019, Facebook’s Libra project brought stablecoins into the mainstream and quickly drew pushback from regulators and central banks, concerned that a private company could create a currency to rival national ones. Even though the project never launched, it marked a turning point: Governments began to take digital money seriously, and discussions about stablecoins moved from developer forums to international policy tables.
As decentralized finance took off during the “DeFi Summer” of 2020, stablecoins became the backbone of the new onchain economy. They powered borrowing, lending, and trading on platforms like Compound, Aave, and Uniswap, becoming essential infrastructure for users moving through dynamic crypto markets.
Soon after came a major crisis. In 2022, Terra USD (UST), an algorithmic stablecoin that relied on incentives and arbitrage instead of reserves, collapsed. Billions in value were wiped out, and trust in algorithmic models disappeared almost overnight. But it also brought an important reset: Developers, investors, and regulators recognized that long-term stability required tangible backing, transparency, and oversight. The market thus shifted toward collateralized models that could be verified and audited.
Since then, stablecoins have regained their footing, with new projects and players entering the space. PayPal launched PYUSD in August 2023, a dollar-pegged stablecoin integrated into its global payments network. Other fintechs followed, adding stablecoin support to digital wallets and checkout systems. Central banks began testing their own versions through central bank digital currencies (CBDCs), recognizing that digital value transfer had become too efficient to ignore.
“We believe that when stablecoins are trusted, scalable and interoperable, they can fundamentally transform how money moves around the world,” - Rubail Birwadker, Visa
It’s worth noting that most stablecoins today follow one of three models. The first and most common is fiat-collateralized, backed by cash reserves or short-term government securities. USDT and USDC dominate this group, making up nearly 90% of the market. The second is crypto-collateralized, a model defined by projects like DAI, which maintain stability through digital assets locked in smart contracts. Over time, DAI has also added real-world assets such as tokenized Treasuries and USDC to its reserves. A smaller group of algorithmic or hybrid designs experiment with supply-based stability, though trust in them remains limited.
There’s a lot of experimentation happening across the stablecoin landscape: new currencies, new assets, and even new purposes. Tokens like EURC, gold-backed coins, and national stablecoins point to a shift toward more localized and asset-linked models. Others, like Glo Dollar, build giving directly into money. The project donates all profits from the interest earned on reserves to fund public goods and charitable causes.
In just a decade, stablecoins have gone from a niche crypto initiative to part of everyday finance. The question now isn’t whether they work, but how they’ll be governed, audited, and built into the systems we already use.
Ask anyone what crypto’s most useful innovation is, and chances are they’ll say stablecoins. Having started as a tool for traders, they’ve become web3’s most practical building block.
It’s no exaggeration to say that stablecoins serve as the base currency for nearly everything that moves onchain. Most DeFi activity relies on them for trading pairs, collateral, and liquidity; they let users earn yield, borrow, or hedge risk, turning them into the settlement layer for crypto’s internal economy. According to Amber Group, stablecoins account for more than 70% of all onchain settlements, a sign of how deeply they’re embedded in how value moves through the ecosystem.
Stablecoins are also changing how money moves across borders. Traditional remittance systems can take several days and charge around 6% in fees. Sending stablecoins, by contrast, costs a fraction of that and typically settles within minutes. That’s why traditional payment companies are joining in: Western Union is piloting stablecoin settlements, while MoneyGram’s integration with Stellar supports USDC transfers that can be cashed out directly in local currency.
Even in everyday transactions, stablecoins are becoming a reliable way to get paid or to pay others. Freelancers and small businesses use them to avoid delays and high banking fees. In regions with limited card infrastructure, local shops and online platforms are increasingly accepting them directly. Apps like MiniPay (built on Celo), Kotani Pay, and Telegram payment bots are making stablecoin payments feel as familiar as Venmo or WeChat Pay.
In places where financial systems are fragile or restrictive, stablecoins have taken on an even bigger role. They’re used to store savings, settle payments, and move money where banks are slow or inaccessible. In Nigeria, where inflation, currency controls, and high remittance costs erode trust in the naira, stablecoin transactions hit nearly $22 billion between July 2023 and June 2024. In Bolivia, crypto use jumped more than 500% in a year as inflation reached a forty-year high. What began as a workaround is now a parallel system helping people save and trade with stability.
While these use cases are impactful on their own, stablecoins also unlock a whole new range of possibilities worth exploring—from community finance and local savings networks to faster, more transparent humanitarian aid. Let’s take a closer look at those next.
In 2024, Mercy Corps Ventures ran a pilot in northeast Syria to see whether stablecoins could make humanitarian aid faster and more transparent. Working with HesabPay and Pioneers Innovation, they sent USDC directly to farmers’ wallets—bypassing intermediaries and risky cash deliveries. The results showed 96% faster delivery, 60% lower costs, and 94 cents from each dollar reaching recipients. For families long cut off from banks, it meant receiving help safely, quickly, and without fear of loss or favoritism.
It’s a great example of how stablecoins can be applied to real-world challenges. Around the world, nonprofits, startups, and local cooperatives are using digital dollars to address bottlenecks in aid, savings, and everyday finance (our friends from web3forgood have a whole stablecoin rubric in their newsletter). Here’s how.
Moving money across borders is expensive. Between fees, currency conversions, and delays, as much as 10–15% of aid funds can disappear before reaching people. Stablecoins help fix that by removing middlemen and sending value directly, quickly, and at low cost. The Syria pilot showed what that looks like in practice: more of every donated dollar reaching the people it’s meant for. They also make direct donations possible, as seen in Ukraine, when NGOs used stablecoins to receive support from donors worldwide.
Stablecoins are helping NGOs overcome infrastructure barriers in conflict or disaster zones. In Afghanistan, Mercy Corps and HesabPay launched a program using a local stablecoin (HAFN) to send $100 monthly to 100 rural households. Offline cards let families access funds even without internet, bypassing the slow hawala network and reducing delivery time from weeks to hours. In Ukraine, UNHCR’s partnership with Stellar used USDC to deliver relief directly to displaced families, who could cash out instantly in local currency. These programs show how blockchain rails can make aid faster, safer, and fully traceable.
Stablecoins can also support long-term financial inclusion. In 2022, CARE International and Binance Charity helped women-led savings groups in Kenya use BUSD vouchers for small business funding, creating secure and trackable savings pools. In Nairobi, Mercy Corps Ventures piloted a stablecoin savings model with informal waste pickers, helping them store earnings digitally and build transaction histories that could unlock access to credit. These efforts show how stablecoins can strengthen local resilience from the ground up.
When aid or microloans are delivered in stablecoins, money moves faster and stays local. Vendors can accept payments directly or cash out through partners, keeping community markets active even in times of crisis. In Vanuatu, Oxfam’s UnBlocked Cash project used blockchain-based stable tokens pegged to local currency to distribute aid faster and at lower cost, reaching over 35,000 people and reducing delivery costs by up to 75%.
For unbanked or underbanked people, stablecoins open the door to secure, self-managed finance. A mobile wallet is enough to store value safely, make payments, or receive money from abroad. Across West Africa, platforms like Yellow Card and Fonbnk connect mobile money users to stablecoin rails, allowing them to move between local currencies and digital dollars within minutes.
In areas hit by droughts, floods, or crop failures, stablecoins are emerging as payout rails for micro-insurance and climate-response programs. In East Africa and Latin America, pilot projects (like this one by Ripple in Kenya) are sending stablecoin payouts directly to farmers’ digital wallets after verified weather events, cutting out paperwork and long settlement times. The approach helps households recover faster and maintain economic stability after climate shocks.
Where there are stablecoins, there’ll always be questions about how they’re regulated. Because they bridge crypto and traditional finance, governments worldwide are still defining how they fit into existing laws. Clear frameworks can build institutional trust, while undefined rules can either limit adoption or, in many cases, allow it to grow faster—especially in places where formal financial access is limited.
The United States has taken one of the first major steps toward clarity. The GENIUS Act (aka the Stablecoin Trust Act) passed in mid-2025, establishing national standards for stablecoin issuers. It requires them to hold high-quality reserves, undergo regular audits, and obtain a dedicated license. The goal is to protect consumers and bring stablecoins under formal financial oversight. Issuers such as Circle (behind USDC) have supported the move, while decentralized projects have raised concerns about how such rules apply to systems without a central operator.
In Europe, the Markets in Crypto-Assets Regulation (MiCA) is now fully in force, after rolling out through 2024. It classifies stablecoins as either “asset-referenced tokens” or “e-money tokens” and bans algorithmic models that aren’t backed by tangible reserves. The framework pushes the market toward fully collateralized and auditable models, strengthening consumer protection and institutional confidence.
The Global South shows a mix of approaches. Singapore and the UAE have introduced stablecoin frameworks to attract innovation and cross-border payments, while Hong Kong and Japan now license yen- and HKD-backed tokens for use in local payment networks. Others, like Nigeria and India, have imposed stricter controls while testing central bank digital currencies such as the eNaira. And in parts of Africa and Latin America, regulators worry that growing reliance on USD-backed stablecoins could deepen dollarization and weaken local currencies.
As of October 2025, dollar-denominated stablecoins account for roughly 99.8 % of total market capitalization.
That concern isn’t unfounded. Dollar-based stablecoins dominate the market, and most are backed by US Treasuries and cash reserves, tying their stability to the health of the American financial system. While that anchor has brought global confidence, it also concentrates risk—especially if political or monetary shocks undermine trust in US debt.
Even the IMF has warned that dollar-linked stablecoins could weaken monetary control in emerging markets by encouraging currency substitution and reducing the influence of local central banks. Looking ahead, diversification may mean moving beyond the dollar toward other currencies and asset-backed models such as EURC, JPYC, or tokenized real-world assets.
Stablecoins are proving their utility, but turning pilots into real-world infrastructure will take more than technology. In impact settings, education and last-mile access remain a major challenge. Many recipients still lack smartphones, internet access, or the digital literacy to use wallets safely. That’s why lightweight tools like MiniPay, which now counts over 200 million transactions, are being built to run on low-cost phones and minimal data connections.
At this stage, scale won’t come from minting more stablecoins, but from making them move better. The next breakthroughs will come from coordination: the bridges, wallets, and payment layers that let value flow smoothly. Stripe’s integration of stablecoin payments for subscriptions, MoneyGram’s rollout in Colombia, and platforms like Chipper Cash in Africa all point to the same lesson: adoption follows movement.
The stablecoin landscape is dynamically shaped as much by regulation as by innovation. NGOs and startups working across borders must navigate shifting laws that can redefine what’s possible from one country to the next. At the same time, central banks are rolling out digital currencies like China’s digital yuan to Nigeria’s eNaira, while developers experiment with programmable stablecoins that channel part of each transaction toward climate or community projects. Together, these trends point to a future where money itself can carry built-in impact.
At Crypto Altruists, we see stablecoins as one of the most practical bridges between technology and real-world impact. They won’t fix global finance overnight, but they’re already connecting systems, currencies, and communities that haven’t worked together efficiently before.
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