The stablecoin market has become one of the most important developments in global finance over the past five years. Initially created to provide liquidity within cryptocurrency markets, stablecoins are increasingly evolving into core financial infrastructure for payments, treasury management, foreign exchange, trade settlement and cross-border commerce. Yet despite the inherently multi-currency nature of the global economy, the stablecoin ecosystem remains overwhelmingly dependent on a single currency: the US dollar. According to new research by Standard Chartered and Zodia Markets, this imbalance presents one of the most significant growth opportunities in digital assets today.
The report, Beyond Concentration: Where Non-USD Stablecoins Can Scale, argues that while dollar-backed stablecoins will continue to dominate, the next phase of market growth may come from local-currency stablecoins. Rather than challenging the dollar’s global role directly, these digital currencies could gain traction by solving practical problems in payments, settlement and liquidity management across emerging and frontier markets.
A Market Dominated by the Dollar
Today, more than 98% of all stablecoin market capitalisation is denominated in US dollars. This level of concentration exceeds the dollar’s role in traditional finance, where it accounts for approximately 89% of global foreign-exchange transactions and around 50% of cross-border payments processed through global banking networks. Standard Chartered describes this discrepancy as an “8 percentage point diversification gap”, highlighting the extent to which digital assets have become more dollarised than the international financial system itself.
| Measure | USD Share |
|---|---|
| Stablecoin market capitalisation | Over 98% |
| Global FX transactions | About 89% |
| Global cross-border payments | Approximately 50% |
| Diversification gap identified by Standard Chartered | 8 percentage points |
Source: Standard Chartered Research
This concentration has largely been driven by first-mover advantages enjoyed by dollar-backed stablecoins such as USDT and USDC, deep liquidity pools, global familiarity with the dollar and increasing regulatory clarity in the United States. The recent passage of the US GENIUS Act further strengthens the institutional legitimacy of dollar stablecoins by imposing reserve, compliance and governance requirements on issuers.
However, Standard Chartered argues that the critical question for investors is no longer whether the stablecoin sector will grow. Instead, the focus should be on identifying which currencies will participate in that growth as digital settlement becomes embedded in the global economy.
Why Local-Currency Stablecoins Are Gaining Momentum
Conventional wisdom suggests that major developed-market currencies such as the euro, pound sterling, Swiss franc and Japanese yen should be best positioned to compete with digital dollarisation. Yet the report reaches a different conclusion.
According to Standard Chartered, the strongest demand for local-currency stablecoins may emerge in jurisdictions where financial infrastructure remains relatively inefficient. In these markets, stablecoins are not merely cryptocurrency products; they represent a technological upgrade to existing banking systems.
The report identifies three structural drivers behind this demand: accessibility, settlement speed and relative currency stability.
Accessibility: A Substitute for Missing Financial Infrastructure
Across many developing economies, individuals and businesses continue to face significant barriers when accessing banking services. Opening local-currency accounts can involve extensive documentation requirements, physical presence obligations and operational inefficiencies. Cross-border account access is often even more challenging.
Stablecoins can bypass many of these constraints by providing digital, programmable access to fiat currencies through blockchain networks. As a result, markets with weaker financial infrastructure may paradoxically become the strongest candidates for local-currency stablecoin adoption.
The report highlights several infrastructure weaknesses that stablecoins can help address:
- Limited correspondent banking networks.
- Restricted access to international payment systems.
- Underdeveloped foreign-exchange services.
- Banking-hour limitations.
- Cross-border settlement challenges.
Settlement Speed as a Competitive Advantage
One of the most compelling advantages of stablecoins is their ability to provide near-instant settlement. Traditional banking systems often operate only during business hours and can require several days to complete international transfers, especially in emerging-market currency corridors. Stablecoins operate continuously, enabling transactions to settle 24 hours a day, seven days a week.
For multinational corporations and financial institutions, this capability can reduce:
- Liquidity requirements.
- Settlement risk.
- Hedging costs.
- Currency exposure arising from payment delays.
- Operational friction across time zones.
In international trade, speed directly translates into lower costs. Consequently, currencies that currently suffer from fragmented payment systems may derive disproportionate benefits from stablecoin-based settlement networks.
Stability: Winning Regionally Instead of Globally
A particularly innovative aspect of the report is its argument that local-currency stablecoins do not need to outperform the US dollar to succeed. Instead, they need only be more stable than neighbouring currencies.
This distinction is critical. A currency may not be viewed as a global reserve asset, but if it offers greater stability within a regional trading bloc, it can become a preferred instrument for digital settlement. Standard Chartered believes this dynamic may drive adoption across regional trade corridors in Africa, Asia and Latin America.
Africa Leads the Stablecoin Opportunity Ranking
To identify where local-currency stablecoins may gain traction, Standard Chartered developed a comparative framework using World Bank B-Ready 2025 metrics. Countries were scored based on four factors:
- Financial-services efficiency.
- Trade-operational efficiency.
- Broader business-operational efficiency.
- Regulatory framework strength.
The resulting rankings reveal a strong African presence among the highest-potential markets.
Top 20 Markets for Local-Currency Stablecoin Demand
| Rank | Country | Score (/100) |
|---|---|---|
| 1 | Côte d’Ivoire | 68.2 |
| 2 | Angola | 66.1 |
| 3 | Central African Republic | 63.8 |
| 4 | Togo | 62.7 |
| 5 | Vanuatu | 62.4 |
| 6 | Pakistan | 62.3 |
| 7 | Benin | 60.1 |
| 8 | Sierra Leone | 60.0 |
| 9 | Namibia | 59.2 |
| 10 | Timor-Leste | 58.7 |
| 11 | Armenia | 58.5 |
| 12 | Indonesia | 58.4 |
| 13 | Ghana | 58.3 |
| 14 | Chad | 58.1 |
| 15 | Rwanda | 57.2 |
| 16 | Colombia | 56.3 |
| 17 | Equatorial Guinea | 56.1 |
| 18 | Costa Rica | 56.1 |
| 19 | Uzbekistan | 55.8 |
| 20 | Senegal | 55.4 |
Source: Standard Chartered analysis using World Bank B-Ready 2025 data
The prominence of Sub-Saharan African countries is noteworthy. Côte d’Ivoire achieved the highest score at 68.2, followed by Angola at 66.1 and the Central African Republic at 63.8. Ghana, Namibia, Rwanda and Senegal also featured prominently.
These results suggest that Africa’s combination of growing digital adoption, payment inefficiencies and expanding intra-regional trade could position the continent as one of the largest beneficiaries of local-currency stablecoins.
Hong Kong Offers a Real-World Example
The report also highlights a live implementation case.Standard Chartered, through its Anchorpoint venture, has secured a stablecoin issuer licence from the Hong Kong Monetary Authority and plans to launch a regulated Hong Kong dollar stablecoin known as HKDAP (Hong Kong Dollar At Par).
The initiative demonstrates how regulatory clarity, institutional backing and public-private collaboration can move stablecoins from concept to practical deployment. It also serves as a model that other jurisdictions could follow when introducing local-currency digital settlement instruments.
Investment Implications
For investors, corporates and financial institutions, the report’s conclusion is clear.
The digital dollar’s dominance remains secure for the foreseeable future. However, as stablecoins become embedded within global payments infrastructure, treasury operations and liquidity management, the overall market is expected to expand dramatically. In such an environment, even a modest decline from today’s 98% dollar concentration could create significant demand for alternative currency-backed stablecoins.
The winners are unlikely to be determined solely by economic size. Instead, success may depend on which currencies can solve practical settlement challenges, enjoy supportive regulation and integrate effectively into growing digital trade corridors.
For Africa in particular, the research suggests that local-currency stablecoins could become a powerful mechanism for improving regional trade efficiency, reducing transaction costs and ensuring domestic currencies remain relevant as finance increasingly migrates onto blockchain-based networks.
In the next phase of digital finance, the competition may not be about replacing the dollar. It may be about deciding which national currencies earn a place beside it.
Read the full report>>> Beyond Concentration: Where Non-USD Stablecoins Can Scale