Stablecoins have been hailed as the answer to achieving seamless and instant cross-border settlement, but there remains several boundaries in Asia before this can be realised.
Asia-Pacific (APAC) is a vast and highly diverse region which dwarfs both the US and Europe in size. Yet that scale has also made it one of the most complex regions in the world for cross-border payments.
Home to several of the world’s largest economies and financial centres, APAC is projected to account for 36% of global outbound cross-border flows by 2033, with volumes expected to reach $24tn.
Despite its position at the centre of global commerce and capital flows, APAC continues to face many of the same frictions that have long challenged international payments.
Foreign exchange costs, multiple banking intermediaries and settlement timeframes of up to five business days remain common features of the current infrastructure underpinning cross-border transactions.
Enter stablecoins.
Few innovations emerging from decentralised finance (DeFi) have been embraced by traditional financial institutions as readily as stablecoins.
Using stablecoins such as USDT or USDC to facilitate international transfers can reduce settlement times from several working days to near-instant execution. Supporters also point to lower remittance costs and improved access to liquidity management, helping explain why payment firms and businesses across APAC are increasingly exploring stablecoins as part of their cross border strategies.
Why the Philippines is becoming a stablecoin testbed
The most common use case for stablecoins in international payments remains business-to-business (B2B) transactions, with the Philippines emerging as one of the region’s leading markets for stablecoin-driven payment innovation.
Speaking to Payment Expert on the sidelines of Money 20/20 Asia earlier this year, Wei Zhou, CEO of Philippines-based Coins.ph, said the country had experienced a “major shift” in inflows following the passing of the GENIUS Act in the US.
“One major shift that we saw last year after the GENIUS Act was passed in the US was we saw a lot of institutions from the US, whether they’re remittance companies, financial institutions, etc., starting to send stablecoins to the Philippines mainly with USDC,” says Zhou.
“We saw a massive organic increase in the amount of USDC that gets created on exchange, from less than $5m a day, to now $30-$40m dollars a day and even higher on the weekends. I think that demand, you don’t really see at the retail level.”
Beyond reducing costs tied to foreign exchange and banking intermediaries, stablecoins are also increasingly being used as treasury and liquidity management tools.
In parts of Africa, stablecoins have additionally gained traction as a hedge against volatile domestic currencies, particularly in markets such as Nigeria.
Mouloukou Sanoh, CEO and Co-Founder of Mansa, believes several APAC are now beginning to mirror the same conditions that accelerated stablecoin adoption across parts of Africa.
“The Philippines has a mature domestic rail in InstaPay, a large licensed EMI base, and significant cross-border flows tied to remittance and trade,” says Sanoh. “Indonesia has BI-FAST domestically and a strong PSP licensing framework, with sizable cross-border SME activity.”
“Vietnam and Thailand are slightly earlier on the same path, with growing licensed operator bases and cross-border friction that looks very similar to what West African operators were solving two years ago. Those are the markets where I expect the African use cases to translate most directly, with the operators moving first and anything touching end users coming later.”
Yet while operators continue testing the speed and scalability of stablecoin payments across new markets, regulatory uncertainty remains one of the sector’s biggest hurdles.
Can APAC build a unified stablecoin framework?
APAC’s size and diversity mean there is unlikely to be a single approach to stablecoin regulation across the region.
China maintains a broad ban on cryptocurrency activity which extends to stablecoins, while Singapore has taken a far more open approach. The Monetary Authority of Singapore (MAS) has introduced a clearer regulatory framework aimed at encouraging digital asset firms to obtain licences and operate within regulated parameters.
“All countries are moving towards regulating and adopting stablecoins, because five years ago, people believed everything about crypto was shady”
Yet despite growing institutional interest, stablecoin regulation across Asia remains fragmented, creating additional complexity for operators looking to scale across multiple jurisdictions.
Speaking to Payment Expert, Juan Etcheverry, Head of Solutioning at dLocal, admits this is “quite challenging” and will only become more fragmented when additional countries begin to map out their guidelines and regulations.
“All countries are moving towards regulating and adopting stablecoins, because five years ago, people believed everything about crypto was shady and today, everyone is adopting and seeing its benefits,” he says.
“We have seen in Brazil recently the launch of Virtual Asset Service Provider (VASP) licenses, in Argentina the same. So in most countries, we’re seeing strong adoption from the governments and of course, the regulation, because they want to have oversight on top of that, but it’s for the sake of consumers and security.”
For many regulators, the challenge now lies in balancing oversight with flexibility, while adapting rules to local market conditions and consumer behaviour.
Zhou points to the Philippines as one example where regulators have attempted to build stablecoin frameworks around existing financial rules, rather than creating entirely new structures.
He explains that Coins.ph has worked with financial regulators through sandbox testing tied to a Philippine Peso (PHP)-backed stablecoin, arguing that existing e-money and VASP frameworks already provide much of the infrastructure needed for stablecoin oversight.
“When we talked to our regulator, we said ‘you don’t have to create new regulations for stablecoins, you already have e-money regulations,” says Zhou. “We are a licensed e-money operator and we’re a licensed VASP that handles crypto.
“Why don’t you set up the boundaries for us to do stablecoins on our platform? Because we already have millions of KYC users. We have millions of people that trade, and we have the wallet infrastructure to support deposit and withdrawal.”
Zhou says Coins.ph has been testing how a PHP-backed stablecoin can be converted into USDC within a live sandbox environment overseen by the Central Bank of the Philippines.
“So under the sandbox for our peso stablecoin, users can deposit peso and then convert it into USDC, one-to-one, with new fees,” says Zhou. “From the back end, we’ll move that peso from your e-money wallet into a trust wallet for a stablecoin, and then our wallet team will go and mint that stablecoin on-chain.
“By allowing your existing VASPs to handle local stablecoins, it just makes a lot of sense. Instead of reinventing the wheel again, we have something that already does like 70/80% of what you want, so why not let these guys just add another business line?”
The race to put local currencies on-chain
One reason Zhou and Coins.ph have begun testing Philippine Peso (PHP)-denominated stablecoins is due to the overwhelming dominance of US dollar-backed stablecoins within the global market.
Dollar-backed stablecoins account for roughly 99% of the more than $300bn global stablecoin market capitalisation. While the US dollar has long been the dominant currency for international trade, some policymakers and financial institutions are increasingly concerned that stablecoins could reinforce that dominance in digital form.
As stablecoin adoption accelerates globally, regulators and firms in regions such as Europe have raised concerns around ‘digital dollarisation’. That concern has helped drive initiatives such as Qivalis’ planned euro-denominated stablecoin launch, while Revolut has also been testing a sterling-backed stablecoin through Financial Conduct Authority sandbox programmes.
Yet concerns around dollar dominance are not unique to stablecoins. Efforts by BRICS nations to reduce reliance on the US dollar in trade and settlement have been ongoing for years.
Zhou acknowledges the scale and liquidity of US dollar stablecoins means their global influence is unlikely to diminish anytime soon.
“The way I see it is that US dollar stablecoins, whether it’s USDC or USDT, are already all on blockchain rails,” says Zhou. “They move in a way that blockchain money moves. For the other currencies, we’re still stuck on traditional ledger or banking rails.”
One challenge for regulators developing local currency stablecoins has been the complexity of converting between stablecoins and domestic fiat currencies through traditional banking infrastructure.
However, if both sides of a transaction operate using stablecoins – for example, sending USDC and receiving a PHP-backed stablecoin – the process can avoid many of the foreign exchange costs and intermediary banking charges associated with traditional cross-border transfers, with users instead primarily paying blockchain transaction, or ‘gas’, fees.
“What I see in the future is that you need other currencies to come on blockchain rails, as well to move at the same speed, the same velocity, and have the sort of the same nature as the US dollar stablecoins, and I think it’s just a matter of time before it happens,” adds Zhou.
The consumer retail push remains unanswered… yet
Once multi-currency stablecoins begin moving deeper into the treasury operations of payment service providers and financial institutions, they may also create a pathway for broader mainstream adoption.
There remains, however, a fundamental hurdle before stablecoins can truly be viewed as a digital alternative to fiat currency: widespread consumer and merchant adoption.
Sanoh believes structural barriers still stand in the way of stablecoins moving from treasury infrastructure into the hands of everyday consumers, despite fintech firms already beginning to remove some of the operational complexity.
“The real barrier is structural,” says Sanoh. “Correspondent banking forces operators to prefund positions across every corridor, settles only within banking hours, and generates reconciliation overhead that compresses margin directly. Licensed payment service providers and electronic money institutions that moved to stablecoin-backed settlement removed most of that drag from their operations.”
“The cost and speed benefits eventually reach end users through cheaper, faster transfers, but the adoption decision itself happens much earlier, inside treasury and operations teams at payment companies.”
Payment firms such as Stripe and Mastercard have already pushed further into stablecoin payment acceptance through merchant payment stacks and checkout integrations. Shopify has also begun accepting USDC payments, while Meta is gradually rolling out stablecoin payout functionality across Facebook, Instagram and WhatsApp.
Etcheverry says consumers may ultimately interact with stablecoins without necessarily realising the underlying infrastructure powering those transactions.
“In five years, we could realise that we have been seeing stablecoins at checkout, either scanning your QR code, getting an address to pay for something at checkout,” concludes Etcheverry.
“I think from a consumer perspective, maybe they don’t even know that on the back end of their US dollar balance sheet that they are seeing stablecoins because behind it, we have seen remittance companies such as Western Union, they’re launching a wallet that has stablecoins in the backend to store of value.”
If stablecoins are to help unlock the frictions holding back APAC’s projected $24tn cross-border payment market, the challenge will extend far beyond regulation alone. Achieving mainstream adoption may ultimately depend on whether the technology can move seamlessly from treasury infrastructure into everyday financial activity.
