A report titled The State of Stablecoins 2019, authored by George Samman and Andrew Masanto in conjunction with Amazix, examines how fiat-pegged digital assets are evolving in response to real-world monetary instability. Rather than framing stablecoins purely as a crypto trading tool, the report places them in the context of rising inflation, currency debasement, and the practical needs of individuals and merchants in vulnerable economies.
The report opens with a stark macroeconomic backdrop. According to its findings, 16 countries currently face annual inflation rates above 20%, while some economies have suffered far more severe breakdowns. Venezuela is cited as a leading example, with inflation reaching 80,000% in 2018. Under such conditions, the report argues, people need financial instruments that can preserve value more reliably than local fiat while also avoiding the extreme volatility associated with many cryptocurrencies.
Stablecoins as a Response to Currency Instability
The central case made in the report is that stablecoins emerged to address a gap left by both national currencies and conventional crypto assets. In inflation-hit countries, ordinary citizens need a way to protect their savings, send money abroad, receive remittances from family members, and transact with less uncertainty. Merchants, meanwhile, need a medium of exchange that is more stable than volatile digital assets and more resilient than weakening domestic currencies.
This framing gives stablecoins a broader social and economic role than simply serving as on-chain liquidity tools. The report suggests they may become especially useful where trust in local monetary systems has deteriorated. In that sense, stablecoins are presented not as a niche financial innovation, but as a potential bridge between blockchain infrastructure and everyday monetary needs in distressed economies.
To support its conclusions, the study surveyed 40 cryptocurrency and stablecoin companies. From those responses, the authors outlined several themes that they believe define the next stage of the sector’s development.
Why Developing Economies May Adopt First
One of the report’s clearest conclusions is that early mass adoption of stablecoins is unlikely to begin in developed economies with relatively stable national currencies. Instead, the strongest demand may emerge in developing countries where inflation is high and access to reliable financial services is limited.
This thesis runs counter to the assumption that innovation always starts in advanced financial markets. The report argues that necessity may be the stronger driver. Where local purchasing power deteriorates rapidly and capital controls or weak banking infrastructure limit options, a fiat-pegged digital currency can become more than a convenience—it can become a defensive financial tool.
The authors also expect the stablecoin model to evolve beyond its current dependence on the US dollar. While most major projects at the time of the survey were still dollar-linked, the report forecasts that future stablecoins may increasingly rely on a diversified basket of tokenized assets rather than a single fiat reference point. That shift, if it occurs, could broaden the use cases for stable-value digital assets and reduce overreliance on one currency standard.
Ethereum’s Dominance in Issuance and Trading
The 82-page report also highlights the extent to which Ethereum dominated the stablecoin landscape among surveyed projects. It found that 68.4% of the stablecoin initiatives included in the study were built on Ethereum. That made Ethereum the clear leader in issuance and transaction activity, reinforcing its role as the primary base layer for tokenized dollars and other stable-value assets.
Examples of Ethereum-based stablecoins mentioned in the report include DAI and USDC, both of which became foundational assets in the broader digital asset economy. By comparison, Stellar ranked a distant second, with only 7.9% of surveyed projects launched on its blockchain.
Even so, the report notes that not all projects were committed to remaining on their original chains. Some respondents expressed interest in migrating to alternative blockchains or to their own native networks. That detail suggests that while Ethereum was dominant, competition over cost, scalability, governance, and ecosystem control was already part of the conversation.
Centralization and Regulatory Attitudes
Another important finding from the survey concerns governance and regulation. The report argues that many stablecoin projects remain highly centralized in practice, even if they operate in a blockchain-native environment. This becomes especially visible in how teams view compliance and state oversight.
According to the survey, more than one third of projects viewed regulation favorably. Only 13.2% said they did not welcome regulation, emphasizing that self-governance and full decentralization should take priority instead. These figures illustrate a major divide within the stablecoin sector: some projects see regulatory clarity as essential for adoption and trust, while others consider it a constraint on the decentralized ambitions of crypto finance.
The finding is significant because stablecoins occupy a unique position in the digital asset market. Unlike many crypto tokens, they are often intended for payments, savings, and settlement. That functional role makes them more likely to intersect with licensing, reserve disclosures, consumer protection rules, and other forms of financial oversight.
Industry Coordination Still Needed
Amazix, which co-sponsored the report, cited comments from Reserve CEO Nevin Freeman to reinforce the idea that the sector was making progress but had not yet matured. Freeman said the stablecoin market had taken meaningful strides over the previous year, but that much more work remained. In particular, he called for greater coordination among projects and a stronger focus on applying stablecoins to real-world problems in the places where they are most needed.
That emphasis is notable because it shifts the discussion away from token design alone and toward deployment. In other words, the report does not simply ask whether stablecoins can be created or traded efficiently. It asks whether they can solve meaningful problems in economies affected by inflation, weak institutions, or barriers to cross-border payments.
From Stable Asset to Internet Monetary Layer
Beyond immediate market structure, the report takes a broader philosophical view of the sector. It also warns about the long historical record of fiat currency crises, listing dozens of countries that have experienced monetary breakdowns since the 1980s. Against that history, stablecoins are positioned as a possible new financial layer—one that could exist online, move globally, and operate independently of the vulnerabilities of any single national currency system.
The report ultimately presents an ambitious endgame: the “holy grail” of stablecoins is to become a decentralized central bank for the internet. Yet the authors argue that such a vision cannot be realized unless the internet itself becomes truly decentralized. That conclusion ties the future of stablecoins not only to payments and reserves, but also to deeper questions about digital infrastructure, governance, and open access.
Overall, the report portrays stablecoins as one of the most practical branches of the digital asset economy. Its findings suggest that their long-term significance may depend less on speculation and more on utility—especially in countries where inflation erodes trust in money and where access to stable financial rails remains limited. At the same time, Ethereum’s dominance, the sector’s centralization tendencies, and the unresolved balance between compliance and decentralization all point to an ecosystem still in formation.
If the report’s thesis holds, stablecoin adoption may not begin where financial systems are already efficient and trusted. It may begin where the need is most urgent.