USDT Drives Asian Remittances; Local Coins to Handle Last Mile

Bernardo Bilotta, chief executive of Stables, said USDT powers a large share of cross‑border stablecoin activity across Asia and that local‑currency stablecoins will likely be used for last‑mile payouts by 2026. He estimates roughly half of global stablecoin flows touch Asian markets.

Bilotta pointed to resistance among major commercial banks in Singapore, Hong Kong and Jakarta to directly integrate stablecoins. He attributed the reluctance to banks’ efforts to safeguard relationships with domestic central banks and with Western correspondent banks, whose compliance teams are highly risk‑averse.

He warned that taking on stablecoin processing can create regulatory and reputational exposure while rules remain unsettled. “Taking on stablecoin exposure, even just for processing, means taking on reputational risk with the regulator before the rules are fully settled,” Bilotta said, adding that the risk of losing a correspondent relationship could cut off access to U.S. dollar or euro payment corridors.

Regulatory approaches across the region differ. Singapore has incorporated stablecoin requirements into its Payment Services Act, while Hong Kong has passed a standalone Stablecoins Ordinance. Bilotta described those variations as different regulatory paths aiming for the same protections: reserve backing, redemption rights and anti‑money‑laundering controls. “Framing it as purely a problem misses what’s actually happening,” he said.

The market is heavily dollarized: about 99% of stablecoins are pegged to the U.S. dollar, and local‑currency tokens commonly face thin liquidity and high slippage at payout. Bilotta said demand for dollar exposure explains that pattern. He used the example of a migrant worker sending funds from Singapore to the Philippines, saying such a user values dollar stability and often chooses USDT for that reason.

Bilotta expects a hybrid model to emerge by 2026. Under that model, dollar‑pegged tokens would carry cross‑border flows while regulated local‑currency stablecoins issued by institutions inside target markets would handle conversion at payout. Stables announced a partnership with eStable to add institutional banking infrastructure and local stablecoin issuance, backed in some corridors by USDT and Tether’s Hadron.

Domestic policy changes are creating room for local solutions. Japan is moving toward regulated bank‑issued digital tokens, and frameworks in Singapore are enabling JPY and SGD stablecoins for domestic use. Bilotta said the practical improvement will come when providers can convert incoming USDT flows into local currency at the exact point of payout, which would reduce slippage for remitters and payees.

For now, many commercial banks weigh the potential benefits of adopting stablecoin rails against the risk of regulatory or correspondent banking fallout. Bilotta summarized the industry stance this way: “Until the cost of inaction exceeds the cost of action, the status quo holds.” He said as local settlement rails and regulated token issuance mature, pressure on banks to adopt those tools will increase where last‑mile liquidity becomes reliable.