A newly published report, The State of Stablecoins, argues that the strongest real-world demand for fiat-pegged digital currencies may come not from advanced economies, but from countries where inflation has severely eroded the value of local money. Authored by George Samman and Andrew Masanto in conjunction with Amazix, the report examines the rise of stablecoins against a backdrop of monetary instability and growing demand for more predictable digital payment instruments.
Based on a survey of 40 cryptocurrency and stablecoin companies, the report presents stablecoins as a practical response to a persistent problem: traditional cryptocurrencies may offer censorship resistance and global transferability, but their price volatility can limit usefulness for everyday payments, savings, and remittances. In places where local currencies are rapidly losing purchasing power, the report suggests that a fiat-pegged digital asset may offer a more functional alternative.
Inflation Is Framed as a Core Adoption Catalyst
The report opens with a stark macroeconomic observation: 16 countries currently face annual inflation above 20%, while others have fallen into hyperinflation. It highlights Venezuela as a particularly extreme case, noting that inflation there reached 80,000% in 2018. In that context, the authors argue that citizens need tools that can help preserve value, facilitate cross-border transfers, and support day-to-day commerce without exposing users to the sharp swings associated with many crypto assets.
That framing leads to one of the report’s central conclusions: stablecoins are unlikely to be adopted first in developed economies with relatively stable national currencies. Instead, the report says, adoption is more likely to be driven by developing markets where inflation, capital controls, or weak banking access create a stronger need for dependable digital money. For consumers and merchants in those environments, a fiat-pegged token may serve as a bridge between the efficiency of crypto networks and the stability of conventional units of account.
Stablecoins Are Seen as Solving Real Financial Frictions
The report emphasizes practical use cases over speculative narratives. According to its argument, ordinary citizens need a way to protect savings, send and receive money across borders, and transact in a medium that does not rapidly lose value. Merchants, meanwhile, need a stable form of exchange to conduct business. Stablecoins emerged, the report says, to address precisely those needs.
This is an important distinction in the broader digital asset market. Rather than focusing only on trading or capital gains, the report positions stablecoins as infrastructure for real economic coordination. In inflation-hit countries, the utility case can become especially compelling because volatility in local fiat can be as damaging—or worse—than volatility in crypto, particularly when people are trying to preserve household purchasing power.
Most Stablecoins Still Track the U.S. Dollar
While the report focuses on fiat-pegged digital currencies as a category, it notes that most stablecoins are currently linked to the U.S. dollar. That reflects both the dollar’s global reserve status and the lack of trust many users place in weaker domestic currencies. At the same time, the report argues that the market may evolve beyond a single-currency model.
One of its forward-looking conclusions is that stablecoins could eventually be backed by a diversified basket of tokenized assets rather than relying primarily on one fiat anchor. If that happens, the sector could move toward more resilient collateral models and more globally adaptable digital monetary instruments. The report does not present this shift as complete or immediate, but it clearly sees diversification as a likely direction of travel.
Ethereum Dominates the Current Stablecoin Landscape
The report’s 82 pages also map the underlying blockchain infrastructure used by stablecoin projects. On that front, Ethereum is the clear leader. According to the survey, 68.4% of stablecoin projects are built on Ethereum, underscoring the network’s importance for issuance and trading activity. Notable Ethereum-based examples mentioned in the report include DAI and USDC.
Stellar ranked a distant second, with just 7.9% of surveyed projects built on its network. That gap highlights the extent to which Ethereum had already become the default issuance layer for stable assets at the time of the report’s publication. Even so, the survey also found that some projects were considering migration to other blockchains or to proprietary native networks, suggesting that infrastructure competition remains open despite Ethereum’s clear lead.
For market observers, that concentration matters. Network effects, liquidity, wallet compatibility, and developer tooling all help explain why Ethereum gained such a large share of the stablecoin market. But the fact that some issuers were already evaluating alternatives indicates that cost, scalability, governance, or strategic independence could all become important factors in the next phase of market development.
Regulatory Attitudes Suggest a Centralized Tilt
The report also sheds light on how stablecoin teams view regulation, and the findings suggest the sector was not uniformly aligned with crypto’s more libertarian ideals. More than one-third of surveyed projects viewed regulation favorably, a sign that many issuers saw legal clarity and compliance as beneficial rather than threatening. Only 13.2% did not view regulation favorably, arguing instead that self-governance and complete decentralization were more important.
That split is significant because it reflects a tension at the heart of stablecoins. Many are built on decentralized rails, yet their design, governance, collateral management, or redemption systems often involve highly centralized operators. The report appears to treat that reality as more than a temporary feature; it suggests that, for much of the market, regulation and centralized oversight were seen as compatible with growth.
The Next Step May Be Integration Into Decentralized Banking
Among its more ambitious conclusions, the report argues that the next stage in stablecoin evolution could be integration into decentralized banks. These systems, it says, may be particularly relevant for people in emerging markets and in authoritarian settings, where access to neutral financial infrastructure can be limited. In that sense, the report casts stablecoins not merely as tokens, but as foundational components in a broader reimagining of financial access.
This perspective broadens the stablecoin narrative beyond simple price stability. It suggests that the sector’s long-term significance could lie in how these assets are embedded into lending, savings, payments, and cross-border settlement systems that operate with fewer traditional gatekeepers. Whether that vision is achievable remains open, but the report clearly sees stablecoins as a stepping stone toward larger structural change.
Industry Voices Call for Coordination and Real-World Focus
Amazix, the community management firm that co-sponsored the report, cites Reserve CEO Nevin Freeman as saying that the stablecoin market made significant strides over the previous year, but that much work remained. According to the quote, what the market needs is greater coordination among projects and stronger focus on applying stablecoins to solve real-world problems in places where they are needed most.
That assessment aligns with the report’s broader message. Growth in issuance alone is not enough; relevance depends on whether stablecoins can function reliably for users facing inflation, banking restrictions, or weak local payment systems. In other words, the test for stablecoins is not just whether they can be traded, but whether they can be used.
A Larger Critique of Fiat Fragility
Although the report is centered on digital currencies, it also serves as a critique of the vulnerabilities embedded in fiat systems. It references dozens of countries that have experienced currency crises since the 1980s, using that historical record to argue that monetary instability is not a fringe issue. In such an environment, stablecoins are presented as an attempt to build digitally native monetary tools that can reduce dependence on fragile local currencies.
The report ends with one of its boldest statements: the “holy grail” for stablecoins is to become the decentralized central bank for the internet. At the same time, it acknowledges that such an outcome would require the internet itself to become truly decentralized before a global reserve currency of that kind could emerge.
Overall, The State of Stablecoins portrays the sector as moving beyond a narrow crypto niche. Its main thesis is straightforward: stablecoins matter most where monetary instability is most severe. And for now, the infrastructure story is equally clear—Ethereum remains the dominant foundation for issuance and trade, even as the market continues to search for more scalable, diversified, and globally useful forms of digital money.