Stablecoin Adoption Hindered by Fragmented Regulatory Frameworks

The World Trade Organization (WTO) has highlighted the potential of stablecoins to improve international trade payments, but notes that fragmented national regulatory frameworks are hindering their adoption.

According to the WTO's report, 'Stablecoins in International Trade', stablecoins currently account for only about 3% of international payments. However, their use in cross-border payments increased by approximately 35-fold from 2020 to mid-2024.

'The constraint is not technology, but regulation and gaps in regulatory frameworks,' said Juan Marchetti, the WTO's director of trade in services and investment.

The report also notes that stablecoins can help address five major problems in trade finance: high costs, slow processing, limited access, weak transparency, and foreign-exchange constraints. The potential gains are especially large for developing countries, where stablecoins can reduce remittance costs.