Are Stablecoins Truly Widely Used in Transactions? 🤔
Recent research conducted by American multinational payment giant Visa challenges the widespread adoption of stablecoins in payment transactions. The study reveals that over 90% of stablecoin transactions are not initiated by genuine users, indicating a lack of organic use of these cryptocurrencies.
Visa’s New Metric: Organic Stablecoin Transactions Only 10% 📊
Visa, in collaboration with Allium Labs, has developed a new metric to filter out bot-driven and large-scale trader transactions, focusing solely on those generated by real individuals. Out of a total of $2.2 trillion in transactions in April, only $149 billion were identified as “organic payments activity,” according to Visa’s findings.
- The dashboard aims to eliminate potential distortions arising from inorganic activities and artificial inflationary practices.
- It utilizes two crucial filters: the single-directional volume filter and the inorganic user filter.
Single-Directional Volume Filter 🔄
The single-directional volume filter identifies the largest stablecoin amount transferred within a single transaction, excluding redundant internal transactions in smart contract interactions.
Inorganic User Filter 🤖
The inorganic user filter analyzes transactions sent from accounts with minimal activity, filtering out bot-driven and automated transactions from large entities like centralized exchanges.
Is the Stablecoin Market Still Maturing? 🌱
Airwallex’s executive general manager for EMEA, Pranav Sood, believes that the data signifies stablecoins are still in the early stages of development as a payment solution. While recognizing the future potential of stablecoins, Sood emphasizes enhancing existing payment systems in the short and medium term.
- Blockchain intelligence firm Glassnode previously estimated that the $3 trillion market circulation during the 2021 bull market peak was closer to $875 billion.
- Stablecoin transactions may be double-counted depending on the platforms involved.
Future of Stablecoins in Payments Sector 💸
Experts predict that the total value of all circulating stablecoins could surge to $2.8 trillion by 2028, reflecting an 18-fold increase from the current circulation. Many within the crypto industry believe that stablecoins, with their swift and cost-effective transactions, have the potential to disrupt the payments sector.
- PayPal and Stripe have already taken steps to integrate stablecoins into their payment systems for seamless transactions.
Closing Thoughts on Stablecoin Adoption 🚀
While stablecoins continue to gain traction in the financial landscape, challenges regarding organic usage and accurate tracking persist. The future outlook for stablecoins appears promising, with potential widespread adoption in the payments industry. As the market evolves, it will be interesting to observe how stablecoins reshape traditional payment methods and contribute to fintech innovation.
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