A recent report shows that so-called stablecoins, cryptocurrencies that are linked to the value of another asset or currency, are becoming increasingly popular. They have long enjoyed great popularity in cryptocurrency trading, but are also seeing a strong upswing as a means of payment. Almost as many transactions are now processed with stablecoins as transactions via well-known traditional payment processors.
VISA and the rise of stablecoins
From report by Brevan Howard Digital, cited The unstoppable rise of stablecoinsthe total number of stablecoin transactions will reach a whopping value of more than $11 trillion by 2022.
Compared to the number of transactions that the well-known VISA carries out, stablecoins are on the rise. The payments giant reached a total transaction value of $11.6 trillion in the same year, which is only slightly more than the total value of stablecoin transactions.
The research was supported by an analysis of transactions across the most prominent stablecoin providers such as Tether (USDT), USD Coin (USDC), Binance USD (BUSD) and TrueUSD (TUSD). The transaction activities of the various stablecoins were analyzed via well-known blockchains from Avalanche, Binance Smart Chain, Ethereum and Tron, among others.
The most surprising was the Ethereum (ETH) blockchain. Although Ethereum handled about half of the stablecoin volume, it only contributed to 3% of the total stablecoin transactions due to high transaction fees.
Sharp drop in transaction volume on crypto exchanges
According to the report, there are more than 25 million active blockchain accounts holding stablecoins. Up to 80% of these accounts have stablecoins ranging in average value from $1 to $100. Up to 5 million blockchain addresses are active every week. At least three-fourths of these addresses make payments under $1,000. The report shows that stablecoin payments are the most common among non-speculative payments.
The report emphasizes that the use of stablecoins is not tied to the trading volume of cryptocurrency exchanges. Since the end of 2021, total stablecoin transaction volume has fallen by a tiny 11%. Crypto exchanges, on the other hand, saw a more than 60% drop.
