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Stablecoin Surge: Over $11 Trillion in Payments Rival Visa’s Dominance

The stablecoin market is growing fast as adoption in the crypto market increases overall, according to a report by hedge fund manager Brevan Howard Digital. While the general crypto market fell over 60% since December 2021, stablecoin volume only fell by around 11%.

And although Visa transactions account for $11.6 trillion annually, stablecoin transactions come close to this figure with $11 trillion in transactions. Stablecoin transactions leave Mastercard and PayPal far behind with $6.57 trillion and $1.4 trillion in annual settlements.

Over 25 million addresses now hold $1 or more in stablecoins, while around 20 million addresses hold upwards of $1 and up to $100. This indicates broad-scale adoption of day-to-day transactions by underserved customers often cut off from traditional banking services, according to the report.

Tether Remains at the Forefront

Interestingly, much of the stablecoin use is happening outside the United States and mainly in USDT. Tether (USDT) payments account for three-quarters of transactions and 55% of year-to-date volume. The Tron (TRX) blockchain also sees more stablecoin activity than any other blockchain, with 37% of weekly transactions and 35% of volume. 

Ledgerinsights speculated the reason behind the large volume of TRX usage is the high utilization in Asia, especially in China. The high user volume in China is backed up by Tron founder Justin Sun. Sun has been charged by the United States SEC for alleged sales of TRX as a security and manipulative wash trading; the agency alleges Sun wanted to keep interest high and maintain price stability.

Stablecoins owe their popularity to the ease with which value can be transmitted globally to anyone with an internet connection. This sets stablecoins apart from the more speculative aspect of the general crypto space. Of course, there have been other stablecoins, such as the Euro Coin (EUROC), based on the Euro and accessible on Ethereum and Avalanche. However, their usage and volume by far lag behind US dollar-based stablecoins.

The report by Brevan and Howards also notes that USDC adoption is increasing with increased active addresses, transactions, and volume. The increase in stablecoin usage has caught traditional payment providers’ attention, with PayPal announcing its own stablecoin PayPal USD (PYUSD) in early August.

Indeed, the report highlights the importance of smaller dollar payment amounts made via stablecoins. These are payments largely outside of the United States, as Jeremy Allaire, the CEO of Circle, the company behind stablecoin USDC, said. He believes that 70% of USDC adoption was outside of the US, while Brevan and Howards believe non-US usage of USDT is still significantly higher.

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