Development Trends and Challenges for Non-USD Stablecoins

Published by the Asian Financial Coorporation Association (AFCA)

While USD-pegged stablecoins (such as USDT and USDC) dominate today, stablecoins pegged to other currencies also have the potential for significant success, but their trajectory will be highly dependent on specific use cases, regulatory environments, and regional economic factors.

This working paper examines the development trends and challenges facing stablecoins pegged to currencies other than the US dollar. It identifies regulatory environment, use-case specificity, and regional economic factors as the primary determinants of whether a given non-USD stablecoin can achieve meaningful adoption. Stablecoins pegged to the Euro, Hong Kong Dollar, Singapore Dollar, or regional currencies face distinct challenges and opportunities depending on their market context and the trust infrastructure available to support them.

Key findings include the importance of reserve transparency and independent auditing mechanisms, the role of central bank digital currencies (CBDCs) as both complements and potential competitors, and the need for cross-border interoperability frameworks to make non-USD stablecoins viable in trade finance and remittance corridors where demand is most acute.