BVNK Report: $11.6B in Business Capital Tied Up in Slow Payments Could Be Freed by Stablecoins
A new report from Cebr and BVNK, marking the 10th anniversary of the first stablecoin, reveals that stablecoins could unlock $11.6 billion of trapped business capital currently held in sluggish payment systems.
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As the stablecoin market cap reaches $160 billion, the analysis underscores the potential of stablecoins to revolutionize financial transactions, enhance economic efficiency, and mitigate currency volatility.
“Stablecoins are revolutionizing global payments by providing instantaneous transactions and addressing inefficiencies in traditional systemsBen Reynolds,” noted MD of BVNK US. “They offer a powerful alternative that enhances capital efficiency and liquidity for businesses.”
Key Findings
Mitigating Currency Volatility: Stablecoins, primarily pegged to the US dollar, can help counteract significant GDP losses due to local currency fluctuations in emerging markets. Since 1992, these losses have averaged 9.4% of GDP in 17 countries studied, with notable impacts in Indonesia and Brazil.
Bridging the Dollar Gap: In emerging economies, businesses and consumers are willing to pay an average premium of 4.7% for stablecoins, with premiums reaching up to 30% in Argentina. By 2027, it’s projected that $25.4 billion will be spent on these premiums in the studied countries.
Releasing Trapped Capital: Traditional cross-border payment systems cause delays, trapping $11.6 billion in working capital. Stablecoins are expected to facilitate $2.8 trillion in cross-border payments in 2024, freeing up funds 3-6 days earlier and potentially generating $2.9 billion in economic benefits by 2027. Additionally, stablecoins could release over $5 trillion in locked capital by eliminating the need for pre-funded accounts.
Stablecoins and Economic Impact: Expert Insights
Nina Skero, CEO at Cebr, highlighted the broader economic implications: “The increasing global adoption of stablecoins addresses the problems associated with slow payment systems and currency volatility. By streamlining transactions and releasing idle capital, stablecoins contribute to increased economic output and improved financial stability.”
“With projections of stablecoin payment volumes reaching $15 trillion by 2030, the rise of yield-bearing stablecoins will also have a profound impact on the industry. At 3% interest rates, stablecoin issuers could generate $30 billion annually through yield on stablecoin deposits by 2030.”
Chris Harmse, BVNK Co-founder
For a detailed analysis and additional insights, including case studies and expert commentary from Circle, Visa, Worldpay, Chainalysis, and First Digital, access the full report from Cebr and BVNK at www.bvnk.com/report/decade-of-digital-dollars.
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About Cebr
Cebr, with over 30 years of expertise, provides independent economic forecasting and analysis, helping clients navigate economic developments. More information is available at www.cebr.com.
About BVNK
BVNK offers modern payments infrastructure, integrating banks and blockchains to streamline transactions. Businesses can use BVNK to manage stablecoin payments, currency conversions, and crypto integrations. Learn more at www.bvnk.com.