Summary
- In 2025, stablecoin transactions surged past $28 trillion, outpacing the combined totals of Visa and Mastercard, yet the concentration of founders and venture capital remains primarily in the U.S. and Europe.
- Emerging markets demonstrate a significant demand for stablecoins, serving as vital financial tools; Nigeria boasts over 26 million crypto users, while Argentina sees stablecoin trades account for more than half of all exchange transactions.
- According to Alex Witt, General Partner at Verda Ventures, investors focusing on founders in cities like Lagos, São Paulo, and Manila are likely to experience the most substantial returns from stablecoins in the coming decade.
Many people believe the potential for stablecoins lies where investment capital is abundant, specifically in cities like New York, San Francisco, and London. However, the largest stablecoin markets are located in regions where many venture capitalists have yet to engage.
By 2025, stablecoin transaction volumes had exceeded $28 trillion worldwide, surpassing the totals for Visa and Mastercard. Despite this, the majority of founders and investments are still concentrated in the U.S. and Europe, where stablecoins are primarily perceived as institutional products. This segment is becoming increasingly competitive, with major players like BlackRock, JPMorgan, and Fidelity entering tokenized money markets and enterprise settlements, leaving less space for startups than the prevailing narrative suggests.
The genuine demand for stablecoins is emerging elsewhere. Nigeria alone has more than 26 million crypto users, accounting for over 12% of its adult population, with 59% of these users holding USDT. In Latin America, stablecoin transactions constitute 7.7% of the region's GDP, according to IMF data. The pressing question is not whether emerging markets are relevant; rather, it is why many venture capital portfolios continue to ignore this data.
Mismatch Between Stablecoin Volume and Founders
Stablescape, which monitors over 3,000 stablecoin and crypto-fintech firms globally, reports that 1,300 are situated in the United States. Meanwhile, emerging markets in Latin America, sub-Saharan Africa, Southeast Asia, and the Middle East account for merely 32% of tracked companies, even though they generate a majority of real-world stablecoin transaction volumes.
In Argentina, stablecoin purchases represent over half of all exchange transactions, fueled by soaring inflation rates and strict currency regulations that complicate access to dollars. Brazil has recorded $318.8 billion in crypto inflows by mid-2025, with more than 90% of these transactions conducted through stablecoins. In sub-Saharan Africa, the market grew by 52% year-on-year, accumulating over $205 billion in on-chain value. Yet, the founders developing the necessary infrastructure for this demand remain largely based in regions where such issues have not been prevalent.
Stablecoins as Essential Products in Emerging Markets
The prevailing narrative in Western markets often views stablecoins as tools for advanced applications, such as programmable settlement systems, DeFi yield opportunities, and enterprise treasury management. In contrast, stablecoins in emerging markets enhance existing systems. For millions in places like Lagos, Buenos Aires, and Istanbul, stablecoins provide a reliable method to preserve dollar value outside of failing banks, collapsing currencies, or intermediaries that can abruptly restrict access.
In Latin America, B2B stablecoin transactions surged from under $100 million monthly in early 2023 to over $6 billion monthly by mid-2025, marking a 60-fold increase driven by cross-border trade rather than retail speculation. Consumer-focused stablecoin products face escalating overhead costs linked to compliance as user bases grow, unstable local banking relationships, and unit economics that often fail to sustain small retail transfers. Yellow Card, which operates in 34 countries, exited its consumer segment to concentrate on B2B transactions, while Bitso established its stronghold in the Mexico-U.S. corridor by focusing on business payment flows instead of retail wallets. In both cases, the advantage stemmed from founders with in-depth knowledge of their respective markets.
Venture Capital's Oversight of Stablecoin Opportunities in Emerging Markets
In 2024, 30 venture capital firms secured 75% of the total capital raised by U.S. funds. While these funds grasp the macroeconomic potential of stablecoins, they misjudge the geographical landscape.
Patterns recognized by a Sand Hill Road fund regarding San Francisco entrepreneurs offer little insight into which founders in Lagos, Buenos Aires, or Manila are capable of executing their visions. Critics argue that fintech in emerging markets lacks viable exit strategies, yet data contradicts this claim. OPay is aiming for a $4 billion valuation ahead of a potential IPO, supported by its African payments infrastructure, while Modern Treasury acquired Beam, a startup focused on stablecoin cross-border liquidity, for $40 million. The exit market is evolving around the same corridors that Western funds have been slow to invest in.
Regulatory factors further exacerbate this concentration. Legislative measures like the GENIUS Act and MiCA provide significant clarity, attracting institutional capital. However, this perspective overlooks that U.S. regulatory clarity primarily aims to make stablecoins compliant for corporate use. The volume generated in Nigeria and Argentina does not require additional regulatory clarity and surpasses the U.S. market by nearly every measure, supported by companies funded by regional networks that Western investors do not engage with.
Emerging Markets as Future Hotspots for Stablecoin Success
The Philippines saw $39.6 billion in personal remittances in 2025, with transfer fees averaging between 5% and 7%, while stablecoin transfers cost only a fraction of that. Nigeria's 2025 Investment and Securities Act has brought virtual assets under regulatory oversight, with licensing frameworks emerging in South Africa, Botswana, Mauritius, and Namibia, alongside operational regulatory sandboxes in East and West Africa.
These regions are poised to cultivate the stablecoin enterprises of the next decade, similar to how Brazil fostered Nubank by catering to customers overlooked by the existing financial systems, leveraging local insights that outside entrants have struggled to replicate. El Dorado, a Latin American stablecoin super-app, reached over 600,000 users and 3 million transactions in 2025, achieving $2.7 million in annual recurring revenue through a 12x annual growth rate, making it the most downloaded crypto app in Venezuela. Backed by Multicoin Capital and Coinbase Ventures after the market validated its model, this sequence—volume first, local validation second, followed by global investment—will likely recur across major emerging market corridors in the next five years.
Investment Insights That Many Funds Overlook
The stablecoin sector has effectively bifurcated. One segment focuses on creating enterprise-grade infrastructure for regulated institutions in the West, encompassing treasury management, compliance solutions, and settlement frameworks. The other segment aims to provide dollar access to billions in unstable monetary environments, where stablecoins are perceived not as crypto assets but as essential financial resources. One side commands the majority of venture capital, while the other side already captures most of the demand.
The on/off-ramp segment, with 57% of its companies founded locally in emerging markets, alongside regional remittance systems and local currency issuers across MENA, Latin America, and Southeast Asia, remains significantly underfunded in comparison to the existing demand. Companies such as Kulipa, which is developing stablecoin payment solutions for African markets, and Mural Pay, which is concentrating on cross-border B2B payments in Latin America, exemplify a category that may seem small by Western VC standards until the corridors they serve become impossible to overlook.
The next wave of stablecoin innovations will emerge from founders based in Lagos, São Paulo, and Manila. The venture funds that establish relationships in these regions now stand to gain the highest returns in stablecoins over the next decade. Those who delay until these companies are listed on Crunchbase will likely face the same premium that investors have historically encountered in every emerging market cycle.
The map of opportunity is already established, and the transaction volume is evident. The only missing element is where venture capital is directing its attention.
Disclosure
The opinions expressed in this article reflect the author's views and are intended solely for informational purposes, not as financial, investment, or other forms of advice.