WTO Study Examines Stablecoins’ Potential and Risks in International Trade

The World Trade Organization (WTO) released a study on Sept. 14 examining the growing role of stablecoins in international trade, launching the publication during its "World Trade and Tech Day" event. The study analyzes how privately issued digital assets pegged to reference assets like the US dollar or the euro could affect cross-border payments and commerce.

According to the report, stablecoins are increasingly being utilized for payments, remittances, and business-to-business transactions despite currently representing a small share of total stablecoin turnover. The WTO stated that the digital assets have the potential to ease trade-related international payments by accelerating settlement times, reducing transaction costs, and enhancing transparency, particularly for traders who encounter obstacles with conventional cross-border payment mechanisms.

However, the study clarifies that stablecoins primarily serve as a payment and settlement mechanism rather than a substitute for trade finance. The WTO noted that stablecoins do not fulfill the credit, guarantee, and risk-mitigation functions essential to merchandise trade, leading to varying relevance between trade in goods and trade in services.

The report also points to significant regulatory, operational, and trust-related challenges that must be addressed prior to broader adoption. Success will depend on governance frameworks, technical capabilities, and cross-jurisdictional interoperability. For developing economies specifically, the report noted that while stablecoins could enhance small firms' access to digital transactions, risks remain due to weak digital infrastructure, limited supervisory capacity, and consumer protection gaps.

WTO Director-General Ngozi Okonjo-Iweala noted in her foreword that the potential benefits of cross-border payments can only be fully realized alongside appropriate regulatory frameworks, interoperable payment infrastructures, and international cooperation. The launch event also featured a keynote address by Pablo Hernández de Cos, General Manager of the Bank for International Settlements.

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