Standard Chartered’s crypto subsidiary, Zodia Markets, has revealed an unexpected trend in stablecoin usage among its clients. Last year, stablecoins pegged to the Turkish lira emerged as the second-most widely used, despite overall volumes remaining small when compared to their dollar-pegged counterparts. Zodia Markets, majority-owned by Standard Chartered, operates as a crypto subsidiary, providing institutional clients with access to stablecoin transactions and other digital asset services. The finding highlights a lack of demand for euro-pegged stablecoins, which some European banks plan to launch this year amidst European Central Bank scepticism.
Nick Philpott, co-founder and interim CEO of Zodia Markets, noted the surprising prominence of the Turkish lira, stating, “Our second-largest currency in terms of stablecoins last year was not the euro or any G10 currency as one perhaps would’ve expected but rather the Turkish lira.” Clients reportedly favoured lira-pegged stablecoins for their superior efficiency, offering faster, more reliable, and cheaper settlement compared to traditional correspondent banking methods. Standard Chartered’s crypto analyst, Geoff Kendrick, suggested future demand for stablecoins is more probable in nations with weaker local financial infrastructure or where a larger portion of the population is excluded from conventional financial systems. In the past year, Zodia handled US$110.5 billion in dollar-pegged stablecoin transactions, US$3.4 billion in lira-pegged ones, and only tens of millions in euro-pegged stablecoins.
Stablecoins, cryptocurrencies pegged to fiat money, have seen a surge in volume in recent years, predominantly within crypto trading rather than as a widespread means of payment. The market is largely dominated by El Salvador-based Tether and U.S. company Circle, which boast approximately US$188 billion and US$76 billion respectively in their dollar-pegged tokens circulating. However, the future of stablecoin demand remains a point of discussion, with a Bank of England policymaker recently suggesting that their utility may eventually fade.
