Stablecoin Payment Adoption Thrives Despite Crypto Market Outflows
The stablecoin market continued to thrive in 2022, settling over $11 trillion in value and attracting over 25 million blockchain addresses holding stablecoins. The report from Brevan Howard, co-authored by Peter Johnson and Sai Nimmagadda, analyzed non-speculative stablecoin usage across various blockchains and layer 2 networks.
Key Points:
– Fiat-backed stablecoins, such as USDT, USDC, BUSD, and TUSD, are the most widely used stablecoins for non-speculative activities.
– Stablecoin volumes only fell by 11% since December 2021, while weekly stablecoin transactions rose by 25%, in contrast to the significant decline in CEX and DEX volumes.
– The total value settled through stablecoins in 2022 approached Visa’s $11.6 trillion figure and surpassed PayPal’s $1.4 trillion figure, with PayPal now launching its own stablecoin, PYUSD.
– Most stablecoin users are likely small/retail users, and over two-thirds of stablecoins are held outside of exchanges and smart contracts.
– Ethereum accounts for only 3% of total transactions but settles roughly 50% of stablecoin volume, while Tron and BSC account for 75% of stablecoin transactions and 41% of volume.
Tether’s USDT remains the dominant stablecoin, comprising over 50% of all stablecoin volume, supply, active addresses, and transactions. Circle’s USDC lost market share to USDT after a loss of confidence during a de-pegging event. Tether recently cut support for three blockchains with minimal stablecoin activity.
Hot Take:
Despite capital outflows from the crypto market, stablecoin payment adoption has continued to grow steadily. Fiat-backed stablecoins, such as USDT and USDC, are the preferred choice for non-speculative activities. Ethereum’s high transaction fees have led to its small share of total transactions, while Tron and BSC dominate stablecoin transactions. Tether remains the king of stablecoins, but new players like PayPal are entering the market. As stablecoins offer stability and low-cost transactions, their adoption is likely to increase further in the coming years.
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