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.