Iran war pushes Asia’s Gulf migrants to use stablecoins for remittances

Iran war pushes Asia’s Gulf migrants to use stablecoins for remittances
Asian migrant workers in the Gulf are testing stablecoins as a backup channel for sending money home, as the Iran war heightens fears that the risk of US sanctions could disrupt remittances that millions of families and several Asian economies rely on.

Remittances from these workers account for 3 per cent to 5 per cent of gross domestic product in several emerging markets – in Nepal, it is as high as 10 per cent, according to data from the Global Settlement Network.

Concerns over remittance flows have escalated after the US warned against toll payments to Iran for ship passage through the Strait of Hormuz, which has largely been blocked amid the ongoing conflict between the two countries.

“There has been a quiet but noticeable informal pivot among South Asian migrant workers, including a significant number from India, towards digital tokens such as stablecoins in the period following the Iran conflict,” said Anndy Lian, a Singapore-based adviser to governments on blockchain and information technology.

“Rather than routing everything through traditional dollar-linked banking channels, a slice of remittances is now moving via instruments like USDT,” he said, referring to the Tether stablecoin backed by the US dollar.

A stablecoin is a type of cryptocurrency designed to maintain a stable value by pegging it to a reserve asset, which could be a fiat currency or other assets, such as gold.

Stablecoins currently account for about 3 to 4 per cent of overall remittances of Gulf-based workers, according to Lian, suggesting that these workers still mostly prefer to transfer money through banks and licensed operators.

Millions of people from India, Sri Lanka, Pakistan, Bangladesh and other countries have worked in the oil-rich Middle East for years. However, their job uncertainties have increased in recent months as the Iran war entangled other Gulf states.

Lian said a key attraction of the widely used USDT was that it commanded a higher value by about 4 to 5 per cent in markets such as India, compared with the official exchange rate for the US dollar, allowing recipients to get more value.

The prospect of sanctions related to the Iran war has raised fears about disruptions to the dollar-based monetary transfers through traditional modes, although there is no sign that Washington is planning to block legitimate remittances, according to Lian.

Several Gulf countries, such as the UAE, Bahrain and Saudi Arabia, have introduced regulations in recent years to allow stablecoins in their financial systems.

Workers in the Middle East are increasingly turning to stablecoins for remittances, given that such transfers are faster than traditional banking systems, according to Lian.

“The shift is real, but incremental, and is concentrated among the more tech-comfortable, urban-linked segment of the diaspora rather than the broader labour corridors,” he said.

Raj Kapoor, president of the India Blockchain Alliance, said global banks had tightened their Gulf operations due to the Iran war, which had affected their treasury and other functions that underpinned remittance flows.

Stablecoins, particularly the USDT and USDC, have filled the gap for financial settlements in the region, according to Kapoor.

“The Iran war has functioned less as a cause and more as a powerful accelerant of a shift that was already structurally under way,” he added.

Ryan Kirkley, co-founder and co-CEO of Global Settlement Network, said the Iran war had caused disruption not only to energy supplies and dollar liquidity but also remittances.

Countries across South Asia and Southeast Asia are reliant on these monetary transfers, with India alone having received US$125 billion in remittances last year and Gulf nations contributing to a third of the figure, according to Kirkley.

Given their significance, compliance standards for stablecoins and tokenised payments should be enhanced and for migrant workers to have this option to send their money home amid the Iran war, Kirkley said.

“If a Gulf bank pulls back on dollar clearing or a UAE exchange house tightens onboarding because of secondary-sanctions exposure, the first thing to feel it is not the oil tanker, it is the construction worker in [the city of] Sharjah trying to send 2,000 UAE dirhams [US$545] home,” he said.

 

Source: https://www.scmp.com/week-asia/economics/article/3353456/iran-war-pushes-asias-gulf-migrants-use-stablecoins-remittances

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PPI day warning: Bitcoin faces make-or-break moment as US$79,900 level hangs in balance

PPI day warning: Bitcoin faces make-or-break moment as US$79,900 level hangs in balance

Bitcoin slipped 1.02 per cent to US$80,700.70 over the past 24 hours, underperforming a broadly flat global equity market amid renewed macroeconomic anxiety. The cryptocurrency’s decline reflects a confluence of sticky inflation data, hawkish Federal Reserve expectations, and escalating geopolitical tensions that have pushed traders toward safer assets. With Bitcoin showing a 76 per cent correlation to the S&P 500, this move appears fundamentally rates-driven rather than crypto-specific, signalling that digital assets remain tethered to traditional monetary policy expectations.

The primary catalyst is hotter-than-expected US inflation data released this week. The April Consumer Price Index print came in at 3.8 per cent year-over-year, exceeding the 3.7 per cent consensus forecast, while core CPI landed at 2.8 per cent. This seemingly small miss has profound implications for market participants who had priced in potential rate cuts later this year.

Instead, traders now face the possibility of prolonged periods of elevated interest rates, or even a rate hike, a scenario that drains liquidity from speculative assets like Bitcoin. The potential appointment of Kevin Warsh, considered a hawkish nominee, as Federal Reserve Chair adds another layer of concern about a higher-for-longer interest rate environment.

Global equity markets reflected this anxiety with mixed but generally negative performance. The S&P 500 slipped 0.16 per cent to 7,400.96, while the technology-heavy Nasdaq Composite led declines with a 0.71 per cent drop to 26,088.20. The Dow Jones Industrial Average bucked the trend, edging up 0.11 per cent to 49,760.56, supported by healthcare stocks like Humana, which surged 7.7 per cent following a bullish price target upgrade.

Technology stocks bore the brunt of the selloff, with Qualcomm plunging 11 per cent and Micron falling 3.6 per cent as a massive monthly semiconductor rally paused. Asian markets showed similar strain, with the Shanghai Composite retreating 0.25 per cent to 4,214.00 on higher energy costs and local economic caution, though the Straits Times Index managed a 0.64 per cent gain to 4,977.58 in early trade on May 13, supported by regional gains and local bank strength.

Geopolitical tensions added pressure when comments from President Trump suggested the US-Iran ceasefire remains fragile. This injected immediate market anxiety and triggered a wave of long liquidations, wiping out over US$52 million in Bitcoin positions in 24 hours. The instability pushed investors toward the dollar, with the US Dollar Index strengthening by 0.305 points to reach 98.26.

Energy markets reacted sharply to the geopolitical strain and continued closure concerns around the Strait of Hormuz. West Texas Intermediate futures jumped over 9.7 per cent to settle at US$95.73 per barrel, while Brent futures surged 9.2 per cent to cross the psychological barrier of US$100 per barrel at US$100.46. Higher energy costs feed back into inflation concerns, creating a cycle that further pressures risk assets.

The bond market sent clear signals about shifting expectations. The benchmark US 10-year Treasury yield rose to 4.43 per cent as investors repriced the probability of future rate cuts. This yield movement directly impacts Bitcoin and other risk assets by increasing the opportunity cost of holding non-yielding investments. Even traditional safe havens like gold struggled, sliding US$14.90 per ounce to US$4,713.80, while silver dropped slightly to US$85.52 per ounce, suggesting that the dollar’s strength overwhelmed traditional flight-to-safety flows.

From a technical perspective, Bitcoin faces a critical juncture. The cryptocurrency has encountered resistance at US$82,000 multiple times and now tests immediate support at the psychological US$80,000 level and the 23.6 per cent Fibonacci retracement at US$79,912. The market structure remains fragile but not broken, with Bitcoin holding above its multi-week bullish trendline.

A break below the US$79,000 support could trigger a drop toward the 38.2 per cent Fibonacci level near US$78,130. The key trigger for the next major move is the Producer Price Index report, which will confirm whether inflation pressures persist at the wholesale level. A hot PPI print could break support and confirm bearish momentum, while a cooler reading might allow Bitcoin to stabilise and potentially reclaim the US$82,000 resistance level.

The current market dynamics reveal that Bitcoin remains highly sensitive to macroeconomic narratives despite its growing institutional adoption through exchange-traded funds. While long-term structural demand from ETFs provides a fundamental floor, short-term sentiment remains cautious and reactive to traditional financial indicators.

The 76 per cent correlation with the S&P 500 underscores that Bitcoin has not yet decoupled from traditional risk assets during periods of monetary policy uncertainty. Traders now watch whether Bitcoin can defend the US$79,900 to US$80,000 support zone following the PPI data release, or whether this marks the beginning of another leg down in a broader risk-off environment driven by inflation fears and geopolitical instability.

Bitcoin’s near-term trajectory hinges on the interplay between macro data, geopolitical developments, and technical levels. The path forward requires careful navigation of both traditional macro indicators and crypto-specific technical levels, with liquidity conditions and leverage ratios playing outsized roles in amplifying moves in either direction.

 

Source: https://e27.co/ppi-day-warning-bitcoin-faces-make-or-break-moment-as-us79900-level-hangs-in-balance-20260513/

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Bitcoin above US$80K but falling: The pre-CPI shakeout or something worse?

Bitcoin above US$80K but falling: The pre-CPI shakeout or something worse?

Global markets displayed remarkable resilience as major US indices edged to new record highs despite escalating geopolitical tensions in the Middle East. This divergence between risk assets and geopolitical uncertainty reflects a market increasingly driven by artificial-intelligence momentum and institutional positioning rather than by traditional fear indicators.

The S&P 500 inched up 0.19 per cent to a historic close of 7,412.84 while the Nasdaq Composite gained 0.1 per cent to end at 26,274.13, supported by a 2.6 per cent jump in the Philadelphia Semiconductor Index. The Dow Jones Industrial Average added 95 points to close at 49,704.47. These gains underscore how AI-driven enthusiasm in the semiconductor sector continues to outweigh concerns over rising crude oil prices, suggesting investors view technological progress as a more durable growth driver than temporary supply shocks.

Across the Asia-Pacific region, stocks climbed at the open on 12 May. Japan’s Nikkei 225 and Australia’s ASX 200 advanced while South Korea’s KOSPI flirted with the 8,000 mark following a significant rally. Singapore presented a more nuanced picture as the Straits Times Index struggled to recapture the 5,000 level.

The Monetary Authority of Singapore tightened policy to combat imported inflation stemming from energy disruptions, highlighting how regional central banks navigate the complex interplay between growth support and price stability. This policy divergence across Asia reflects the varied exposure different economies have to energy shocks and trade dynamics, with export-oriented markets benefiting from global tech demand while import-dependent jurisdictions grapple with cost pressures.

Commodities markets told a story of competing pressures. Brent crude rose to approximately US$104 per barrel after President Trump rejected Iran’s latest peace proposal, describing the current ceasefire as being on massive life support. Copper prices hit record highs, gaining over 13 per cent year-to-date in 2026, signalling strong expectations for industrial demand despite geopolitical headwinds.

Gold faced pressure, sliding nearly three per cent as the US dollar and Treasury yields trended higher. This commodity mix reflects market pricing of both inflation risks stemming from energy disruptions and confidence in economic activity through industrial metals, while traditional safe havens like gold lose appeal amid rising yields. Investors appear to believe that growth expectations can coexist with elevated energy costs, at least for now.

Investors now focus on two pivotal events. Markets brace for the April Consumer Price Index release on 12 May, expected to show headline inflation rising 3.7 per cent year-over-year. This data point could significantly influence expectations for Federal Reserve policy and, consequently, risk asset valuations. Simultaneously, investors monitor a high-stakes meeting between US President Trump and Chinese President Xi Jinping in Beijing this week.

The Trump-Xi Summit scheduled for 14-15 May creates a cautious atmosphere, as uncertainty over trade tariffs or diplomatic shifts often leads to rotation out of volatile assets into perceived safe havens such as the US Dollar or Treasury bonds. These catalysts represent the classic tension between data-dependent policy and geopolitical diplomacy that defines modern market navigation.

Bitcoin’s price direction, trending downward as of the morning of 12 May 2026, reflects this complex macro backdrop. While institutional demand through ETFs remains a long-term support pillar, several immediate factors exert downward pressure. Geopolitical conflict and rising energy costs trigger inflation fears, suggesting the Federal Reserve may keep interest rates higher for longer, which historically proves risk-off for Bitcoin.

Anticipation of economic data creates a wait-and-see approach as traders de-risk ahead of CPI and retail sales releases, leading to lower liquidity and a slight downward drift. Macro uncertainty surrounding the Trump-Xi Summit further encourages caution among crypto investors who recognise that diplomatic outcomes can rapidly reshape risk appetites across all asset classes.

Beneath Bitcoin’s short-term weakness lies a compelling institutional narrative. Around US$858 million flowed into crypto ETFs last week, with analysts linking part of the surge to growing optimism that the US CLARITY Act will finally deliver regulatory clarity. Crypto ETPs saw about US$858 million in net inflows, led by Bitcoin products with roughly US$706 million, supported by inflows into ETH, SOL, and XRP products.

CoinShares and others attribute improved sentiment partly to progress on the CLARITY Act and a stablecoin yield compromise that could reduce US legal uncertainty for digital assets. These inflows pushed total crypto ETP assets above US$160 billion, with Bitcoin again above US$80,000 and altcoin products seeing meaningful participation alongside BTC.

The CLARITY Act matters because it represents the first comprehensive US crypto market structure law, clarifying CFTC versus SEC jurisdiction, exchange registration, and customer protections. That kind of statutory clarity is exactly what many compliance teams say they need before allocating more broadly beyond Bitcoin.

If institutions believe a real framework is finally coming, they can justify building exposure through ETFs now, even before the law is fully passed. The bill’s passage remains far from guaranteed. Banking groups actively push to weaken or stall the legislation, and prediction markets put the odds of passage in 2026 at only the mid-60s to mid-70 per cent range. The May 14 Senate Banking Committee markup stands as a key risk event that could either validate regulatory optimism or trigger a reversal in sentiment.

From my perspective, the current market dynamics reveal a sophisticated institutional ecosystem maturing around digital assets while traditional macro forces still dominate short-term price action. The US$858 million ETF inflow week reflects a powerful combination of Bitcoin-led momentum and rising confidence that the CLARITY Act could finally resolve US crypto rules.

If the bill advances, it could entrench ETFs as the main institutional gateway into BTC, ETH, SOL, XRP, and peers. If it stalls, some of that newly committed capital may prove more fragile, leaving flows to depend mainly on price cycles rather than lasting regulatory reform. Bitcoin consolidating above the US$80,000 support level suggests the current dip represents a pre-CPI shakeout rather than a structural breakdown, provided key technical levels hold.

The broader lesson for investors centres on distinguishing between transient macro noise and enduring structural shifts. Geopolitical tensions, inflation data, and diplomatic summits will always create volatility, but the steady accumulation of crypto exposure through regulated vehicles signals a deeper reallocation of capital.

 
Source: 
 
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