WASHINGTON — As U.S. regulators begin turning a new federal stablecoin framework into detailed rules, officials in many developing countries are weighing whether the tokens can cut payment costs or instead weaken local currencies and bank systems. The debate is sharpening as stablecoins move beyond crypto trading into remittances, online commerce and wholesale settlement, Dec. 25, 2025.
Why stablecoins matter in developing countries
Cross-border payments remain costly and slow for many families and small firms. The World Bank’s remittance price tracker puts the global average cost at 6.49% of the amount sent—more than double the U.N. target—creating a market for cheaper, faster alternatives.
The International Monetary Fund says stablecoins “have great potential to make international payments faster and cheaper,” but warns that broader use can speed up currency substitution and reduce governments’ control over capital flows, especially where inflation is high and trust in local money is thin.
Stablecoins and the new U.S. rulebook
In Washington, the GENIUS Act became law July 18, 2025, setting federal definitions and supervisory lanes for “payment stablecoins.” Supporters say clearer guardrails will improve trust and curb runs; critics worry regulated dollar tokens will spread quickly abroad.
Implementation is now becoming concrete. The FDIC on Dec. 19 proposed a formal approval process for certain banks to issue payment stablecoins through subsidiaries, signaling that issuance inside the insured banking system is no longer hypothetical.
For developing countries, clearer U.S. rules could be a double-edged sword: safer stablecoins may reduce frictions in trade and remittances, but they could also accelerate “digital dollarization,” pulling transactions and deposits away from domestic banks.
China’s yuan-linked stablecoins and a widening split
China is also reassessing. Reuters reported in August that Beijing is considering allowing yuan-backed stablecoins for the first time as part of a broader effort to expand global use of the currency, potentially through offshore structures that preserve capital controls while offering faster settlement for trade.
The result could be a more fragmented world of stablecoins—dollar-linked rails shaped by U.S. supervision and yuan-linked rails shaped by Chinese policy—with developing countries caught between efficiency gains and new dependencies.
Continuity: today’s questions are not new
When Facebook introduced Libra in 2019 as a stablecoin for global payments, it jolted regulators into treating privately issued digital money as a potential systemic risk—not just a fintech experiment, as described in a Thomson Reuters overview.
And in 2022, the algorithmic stablecoin TerraUSD broke its dollar peg and plunged, a reminder that weak design, opaque backing or panic can turn “stable” into a run, as detailed by Reuters’ coverage of the collapse.
What to watch next
Cash-out certainty: Can users reliably redeem stablecoins into local currency during stress?
Reserve quality: Are issuers forced to hold high-quality liquid assets and publish credible disclosures?
Guardrails: Do local rules cover consumer losses, cyber risks and illicit finance without choking legitimate use?
Stablecoins can help people facing high fees and fragile banking, but the same speed and portability that make them useful can also magnify shocks. As U.S. rules harden and China tests a yuan-linked path, developing countries may have to decide how much of their payments system they are willing to outsource.
