In fact, the biggest scenario for stablecoin payments is not in cross-border transactions

Author: Heechang Kang, Four Pillars CSO

Compiled by: Jiahua, ChainCatcher

This article analyzes the geographic payment data from Allium, covering $15.2 billion in on-chain transfers between identified sending and receiving countries. Since most on-chain transactions currently cannot determine specific countries, the data in this article only reflects the identified sample.

Among the $15.2 billion in identifiable stablecoin transaction volume, domestic transfers account for 62.6%; of all identifiable transaction volume, 73.0% of the funds ultimately flow to the region where the sender is located. Therefore, cross-border remittances are actually just a part of the current demand for stablecoins.

The Asia-Pacific region is in a leading position, accounting for 41.0% of total sending transaction volume and 41.6% of global domestic transaction volume, while also showing a net inflow, particularly evident in Indonesia, Singapore, and South Korea.

For institutions evaluating the demand for stablecoin payments, domestic settlement services and cross-border payment channels in the Asia-Pacific region are currently the most noteworthy market opportunities.

1. Stablecoin transactions are primarily a "domestic business"

Domestic transfers, which occur between wallets located in the same country, amount to $9.5 billion, accounting for 62.6% of the $15.2 billion identifiable transaction volume.

Regardless of the region or market size, in most markets with capital outflow activities, domestic transfers are the largest destination for funds.

Turkey ($2.28 billion), South Korea ($1.6 billion), Mexico ($1.53 billion), Indonesia ($1.09 billion), and the United States ($1.07 billion) collectively contribute 79.5% of the global domestic stablecoin transaction volume.

These transactions are completed directly between public chain wallets without the need to go through bank card networks or banking payment systems.

Such a large-scale domestic transaction indicates that users are using stablecoins for payments, transactions, and dollar-denominated savings within their domestic markets. Therefore, cross-border remittances are just a part of the stablecoin use cases.

For institutions designing stablecoin services, compared to developing products solely around cross-border remittances, domestic payments and settlements currently correspond to a larger actual transaction scale.

2. After cross-border transactions, funds are also more likely to stay within the region

If domestic transfers are included, 73.0% of the transaction volume occurs within the region where the sender is located, that is, within the same continent.

Among them, 79.5% of funds in the Asia-Pacific region still flow to this region, while the Middle East and Africa account for 72.0%, North America for 71.4%, and Europe for 49.6%.

From the perspective of fund flows between regions, transactions are clearly concentrated within the region, indicating that most identifiable stablecoin transactions still occur within the sender's region.

Excluding domestic transfers, the share of intra-regional transactions would drop to 27.8% in the $5.68 billion cross-border transaction volume.

Among them, the intra-regional transaction share in the Asia-Pacific region still reaches 43.7%, which is $995 million of the $2.28 billion cross-border transactions. In comparison, North America is 27.0%, and the Middle East and Africa is only 6.3%.

As the largest market in the Middle East and Africa, most cross-border stablecoin funds from Turkey flow to Asia and the Americas.

Within the Asia-Pacific region, the transaction volumes from Taiwan to Indonesia ($13.8 million), from Indonesia to Taiwan ($12.4 million), and from Indonesia to South Korea ($8.9 million) are already quite substantial.

The existing transaction volume has laid the foundation for building regional stablecoin payment infrastructure in the Asia-Pacific region.

Indonesia, Taiwan, South Korea, Australia, and Thailand collectively participated in approximately $1 billion of intra-regional cross-border transactions, while also generating $3.96 billion of domestic transaction volume.

Institutions can assess which cross-border payment channels are worth prioritizing based on the existing liquidity and bilateral demand.

For institutions planning to build regional payment infrastructure, cross-border payment channels such as Taiwan to Indonesia and Indonesia to South Korea have already formed quantifiable bilateral demand, providing a market foundation for early investment.

Currently, the transaction volume that Allium can identify between sending and receiving countries only accounts for 2.9% of all observed transaction volumes. As more country information for transactions is identified, the rankings of these cross-border payment channels may still change.

3. The Asia-Pacific region has become the largest stablecoin trading market

The Asia-Pacific region is the largest area in this dataset, sending $6.23 billion in stablecoins, accounting for 41.0% of identifiable transaction volume; receiving $6.4 billion, accounting for 42.1%.

In terms of sending transaction volume, the Asia-Pacific region is significantly higher than North America's 28.6%, the Middle East and Africa's 22.0%, Europe's 7.5%, and Latin America's 0.8%.

At the same time, the Asia-Pacific region also generated $3.96 billion in domestic transaction volume, equivalent to 41.6% of the global domestic stablecoin transaction total.

This concentration is also evident in major cross-border transactions. Among the 15 largest cross-border stablecoin payment channels globally, 9 involve at least one Asia-Pacific market, with Indonesia appearing in 6 of those channels.

Turkey to Indonesia ($206 million) and the United States to Mexico ($206 million) are the two largest one-way cross-border payment channels.

If the transaction volumes in both directions are combined, the bilateral transaction volume between Indonesia and Turkey reaches $363 million, between Indonesia and Taiwan reaches $262 million, and between South Korea and Turkey reaches $190 million.

These data indicate that a considerable scale of capital flow has formed between the Asian market and markets outside Asia where stablecoin usage is high.

Net inflow data also shows similar characteristics.

The Asia-Pacific region received $167 million more than it sent, showing an overall net inflow; meanwhile, the United States recorded the largest net outflow in the sample.

Indonesia (+$111 million), Singapore (+$57.9 million), and South Korea (+$31.7 million) are among the markets with the largest net inflows in this sample.

Therefore, for institutions evaluating the current demand for stablecoin payments, the Asia-Pacific region has the largest identifiable transaction scale, the highest domestic transaction volume, and positive net inflows of stablecoins.