WTO study explores the role of stablecoins in international trade
A stablecoin is a privately issued digital asset that can be used to make payments. It is designed to maintain a stable value relative to a reference asset, such as the US dollar or the euro. Albeit representing a small share of stablecoins turnover, real payments volumes are steadily growing, led by business-to-business transactions.
In her foreword to the publication, Director-General Ngozi Okonjo-Iweala says: "The WTO has long provided a forum for members to discuss transformative technological developments that influence the conduct of trade. By analysing emerging technologies from a trade perspective, the WTO Secretariat seeks to contribute to informed policymaking and to support members in navigating an increasingly digital global economy."
The report highlights the growing potential of stablecoins for use in international trade transactions. Originally developed to reduce the volatility associated with cryptocurrencies, stablecoins are increasingly being used for payments, remittances, and business-to-business transactions. They can help address persistent frictions in cross-border payments, notably by accelerating settlement times, lowering transaction costs and increasing transparency for consumers. As a result, stablecoins have the potential to ease trade related international payments, particularly benefitting traders who face difficulties in using traditional cross-border payment tools.
At the same time, the report acknowledges that the main use of stablecoins in trade is as a payments and settlement tool and does not substitute for trade finance. They do not replicate the credit, guarantee and risk-mitigation functions that underpin merchandise trade, and this distinction also means their relevance differs across trade in goods and trade in services.
The report also stresses that stablecoins may face significant regulatory, operational and trust related challenges that must be addressed before they can achieve broader adoption. As with many technological innovations, their potential will depend not only on their technical capabilities and interoperability across jurisdictions, but also on the existence of appropriate governance frameworks.
For developing economies, stablecoins present both opportunities and risks, the report argues. By improving small firms' access to digital transactions, it can support their greater participation in international trade. At the same time, limited supervisory capacity, weak digital infrastructure, inadequate consumer protection, and gaps in other financing measures may increase operational and financial risks.
In that regard, DG Okonjo-Iweala notes: "More efficient cross-border payments have the potential to lower transaction costs, facilitate participation in international trade and improve access to global markets. Yet these opportunities can only be fully realized if they are accompanied by appropriate regulatory frameworks, interoperable payment infrastructures, and international cooperation that foster confidence, security and inclusion.
We hope that this report will contribute to the discussion on how to harness technological innovation in ways that make international trade more efficient, inclusive and resilient. As members continue to explore the opportunities and challenges presented by new payment technologies, the WTO will remain a forum for dialogue, analysis and cooperation on issues that shape the future of international trade."
The General Manager of the Bank for International Settlements, Pablo Hernández de Cos, delivered a keynote address during the launch event, followed by a presentation by the Secretariat of the main findings of the report, and a high-level panel discussion on how stablecoins could support more efficient, secure and inclusive international trade. The full programme of the launch event is available here.
The launch event is part of the "World Trade and Tech Day" held on 14 September. The full programme of the event is available here.
The publication is available here.
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