Introduction
Stablecoins deliver value through four core propositions:
- Low cost
- High speed
- Permissionless access
- Programmability
As Nathan, the original author, explains in The What and Why of Programmable Money:
"Programmable money behaves like code-driven logic. It’s not just stablecoins—it’s the fuel for smart contracts. Transactions can be automated based on predefined conditions, eliminating reliance on banks or trust."
These principles translate into four primary use cases: store of value, payments, transfers, and yield generation.
This article explores two distinct user groups:
- Emerging market users (reliant on stablecoins for financial inclusion)
- Western market users (leveraging stablecoins for fintech integration)
The Two User Groups
1. Western Market: Value Hierarchy
In politically stable economies with robust banking systems (the "Global North"), the hierarchy is:
- Programmability (drives DeFi innovation)
- Speed (solves settlement delays in cross-border payments)
- Cost (modest savings compared to traditional fees)
- Permissionless access (less critical due to widespread bank access)
Why USDC thrives here:
- Circle’s focus on programmable efficiency aligns with Western fintech demands.
- Enterprises increasingly build solutions atop USDC.
👉 Discover how USDC powers Western fintech
Bonus: Yield Expectations
Western users expect interest akin to bank deposits—a secondary concern compared to emerging markets’ focus on dollar access.
2. Emerging Markets: Value Hierarchy
For the "Global South" (high inflation, low banking penetration), priorities flip:
- Permissionless access (bypasses exclusion from dollar systems)
- Low cost (slashes remittance fees, e.g., from $115 to <$5)
- Speed (enables real-time transactions vs. days-long waits)
- Programmability (long-term potential, but less urgent)
Why USDT dominates:
- Tether’s liquidity and accessibility meet existential needs—stability over yield.
- Users prioritize converting local currency to dollars securely over earning 3% APY.
Key Takeaways
| Metric | USDC (Western Markets) | USDT (Emerging Markets) |
|----------------|-----------------------------|-----------------------------|
| Primary Use | Fintech integration | Dollar access & remittances |
| Strength | Programmability | Liquidity & accessibility |
| User Need | Tool for efficiency | Survival necessity |
👉 Explore stablecoin strategies for your region
FAQs
Q: Why does USDT lack yield but still dominate?
A: In emerging markets, liquidity and dollar access outweigh yield. USDT’s network effects cement its lead.
Q: Can USDC challenge USDT in emerging markets?
A: Unlikely—USDC’s value proposition aligns with Western fintech, not urgent financial inclusion needs.
Q: Is programmability irrelevant in emerging economies?
A: Not long-term—it enables future services (e.g., microloans), but immediate needs focus on basics.
Q: Why do Western users care about stablecoin yield?
A: They’re accustomed to bank interest, whereas emerging users prioritize escaping currency devaluation.