BIS Reports on Cryptocurrencys Role in Global Trade Flow Dynamics

At its peak in 2021, Bitcoin, Ethereum, USDT, and USDC accounted for $2.8 trillion, or 12% of global commodity trade. These estimates were provided by analysts from the Bank for International Settlements (BIS).

The data, collected from 184 countries, covered the period from Q1 2017 to Q2 2024.

Approximately $1.2 trillion of the $2.8 trillion was made up of transactions involving stablecoins.

By 2023, this total figure decreased to $1.8 trillion but has since started to rise again, indicating a continued, albeit uneven, expansion of the crypto ecosystem.

Initially, Bitcoin dominated transaction volumes, peaking at 80% in Q2 2019. By the end of the study period, its share had dropped to around 25%, with attention shifting towards stablecoins.

Geographic barriers appear to have a lesser impact on digital asset transactions compared to traditional financial systems.

The United States and the United Kingdom accounted for a combined 20% of cross-border payments in Bitcoin and USDC, and nearly 30% for Ethereum.

Experts noted significant geographic shifts in cross-border activity, especially moving from China to other major emerging markets such as India, Indonesia, and Turkey. Together, Turkey and Russia constituted 12% of such transactions in USDT.

The BIS found that capital control measures implemented by various governments do not significantly influence these flows.

Higher alternative costs associated with fiat currencies, such as high inflation, are driving cross-border crypto transactions.

In April, it was reported that the Russian Ministry of Finance proposed developing its own stablecoins pegged to various currencies.