Bloomberg today has a story about the growing use of stablecoins in global trade.

Businesses such as importers and exporters of goods ranging from baby products to furniture in Asia and Europe are using so-called stablecoins including Tether and USD Coin, according to payment processors and over-the-counter trading desks.

Transactions with suppliers and vendors already reach up to $10 million a day at Singapore-based QCP Capital, which caters to such clients. At payment-services provider B2BinPay, transactions already account for millions of dollars a month, and are increasing daily, said the Moscow-based company.

Makes total sense, especially for gray market businesses with tenuous connections to the dollar financial system. Given that most trade is denominated in dollars, cryptocurrencies like Bitcoin may not have previously caught on because of the currency risk, but USD stablecoins fit. Tether makes up most of the market, but

In other nations such as Indonesia, businesses often prefer more regulated stablecoins, such as USD Coin, which are issued by U.S.-regulated financial institutions and audited every month, Sit said.

I imagine that Centre and USDC issuers welcome this growing use. I wonder, though, if this catches on, what their reaction might be if there’s an explosion in growth driven by active avoidance of the US-dominated financial system, and not just small firms seeking efficiencies.

Somewhat related, adult entertainment website Pornhub has added Tether to the payment options available to performers after PayPal cut off the site. Again, makes sense. These performers want to avoid the payments networks that will derisk them, but they’re not interested in the currency risk of accepting Bitcoin. I’m sure they’d also welcome the additional safety that would come from regulatory oversight of stablecoin issuers as long as their use remains permissionless.

Again, I wonder what issuer reaction will be if this kind of gray market use really takes off. I can imagine that if stablecoins like USDC had been around when Backpage lost its payments options whether it wouldn’t have turned to it rather than Bitcoin. If it had, there’s no doubt the issuers would have gotten the same treatment from politicians as did the payments services that ultimately dropped Backpage. The key difference is that as (typically) ERC-20 tokens, it’s not clear to me issuers can do much to single out and prohibit use by particular parties.