This is where stablecoins come in. Because they are backed by or pegged with fiat currencies such as the US dollar, and therefore more stable than other cryptocurrencies, they tend to be more widely accepted across the board. It is this confidence provided by stablecoins that have made stakeholders such as financial institutions and merchants more open to accepting and integrating them into their services, leading to the proliferation of service providers that make use of stablecoins. This includes money and remittance service providers.
The growing number of money and remittance service providers is significant to not only migrant workers but also to other economic participants in emerging markets, namely travellers and crypto traders. Platforms such as Thailand-based Everex and Philippine-based Union Bank, which developed the Thai Baht-backed THBEX and PHX stablecoin respectively, now provide users with a means of not only remitting funds but accessing them using partner ATMs or liquidity providers in a cost-efficient manner.
Tackling issues beyond the crypto space
The use of stablecoins for money or remittance services also addresses issues pertaining to limitations that exist even beyond the crypto space, such as issues related to providing financial inclusion to unbanked or undocumented populations, transparency, and expensive fees charged by mainstream service providers.
One of the most pressing problems faced by remitters in emerging markets, particularly in places which lack the infrastructure to facilitate financial inclusion, is providing money or remittance services to the general population, prompting many to use often unscrupulous means of sending and/or transferring funds to loved ones. This issue is made worse by the fact that these unofficial platforms or service providers often lack transparency and oftentimes charge exploitative fees that consume a significant portion of the funds sent out by remitters.