Unlike in developed nations where crypto competes with fast payment systems, in emerging markets it solves fundamental problems. It provides banking access for the unbanked and a hedge against severe currency devaluation.
Investor sentiment towards China swings wildly from complete avoidance ('ex-China' products) to FOMO within 12-18 months. This creates extreme volatility and opportunities for investors who can navigate these rapid shifts in perception.
For traditional banks, the primary threat from stablecoins isn't just payment competition, but a mass exodus of customer deposits. This would eliminate their cheap funding source, cripple their ability to lend, and force a complete business model overhaul.
Professionals experienced in emerging markets' FX and capital controls find crypto's dynamics familiar. The high volatility and complex cross-border flows in EM serve as a perfect training ground for navigating the digital asset space.
The next evolution of digital payments might bypass stablecoins. Users could transact directly from tokenized money market funds, earning yield until the moment of payment, thus removing the need for a non-yielding stablecoin intermediary.
Due to the immense size of the U.S. market, even minor capital reallocations can cause significant price movements in smaller, less liquid emerging markets. This leverage effect is a key dynamic for EM investors to watch.