As an analyst with a background in financial technology and data analysis, I find the recent Visa report on stablecoin usage quite intriguing. The suggestion that less than 10% of stablecoin transaction volumes are organic and initiated by real users is a significant revelation. This indicates that the stablecoin market may still be in its infancy in terms of widespread adoption for payments.
The use of stablecoins, which have been subject to controversy in the past, is now under scrutiny following a new report raising doubts about their widespread adoption.
Based on Visa’s latest report, approximately 90% of stablecoin transactions can be attributed to non-legitimate users, implying that the widespread use of these cryptocurrencies for payments is still a distant reality.
Only 10% of Stablecoin Transactions Organic
Visa, in collaboration with Allium Labs, has developed a platform for distinguishing human-initiated transactions from those generated by bots and major traders. Out of the $2.2 trillion worth of transactions conducted in April, approximately $149 billion can be attributed to genuine consumer purchases.
Approximately 90% or more of stablecoin transactions may be attributed to sources other than authentic users or organic activity.
As a crypto investor, I prefer to use the “adjusted metric for organic growth” instead. This metric helps me filter out any misleading information caused by unnatural market activities or manipulative price inflations.
The dashboard utilizes two crucial filters for refinement. One is a single-direction volume filter, while the other is an inorganic user filter.
As a crypto investor, I find it helpful to use a volume filter that focuses on the largest stablecoin transfers in individual transactions. This approach filters out repetitive internal transactions that can complicate the analysis of smart contract interactions. By doing so, I can get a clearer picture of the significant stablecoin movements within the network.
During this period, we screen out transactions originating from accounts that have conducted fewer than 1,000 stablecoin transactions or have transferred less than $10 million in value over the last month. By excluding such transactions, we aim to eliminate bot activities and automated transactions from large entities like centralized exchanges.
Stablecoin Market Still in Nascent Stage?
Pranav Sood, Airwallex’s EMEA executive general manager, observed that based on current data, the use of stablecoins as a payment method is still in its infancy. Recognizing their significant future prospects, Sood urged prioritizing enhancements to existing payment structures in the near and intermediate periods instead.
Expert response:
As a researcher studying the world of digital currencies, I’ve come across an intriguing issue with stablecoins: they can result in double-counted transactions depending on the specific platform used. For example, let’s say I convert $100 of Circle’s USDC to PayPal’s PYUSD on Uniswap. This conversion would register as $200 worth of stablecoin volume due to the nature of these transactions.
Experts estimate that the combined value of all circulating stablecoins could surge to a staggering $2.8 trillion by the year 2028 – marking an impressive nearly eighteen-fold increase from their current circulation. Proponents in the crypto community believe that these digital currencies, thanks to their swift and affordable transactions, hold immense potential for revolutionizing the traditional payments industry.
Last year, PayPal introduced its own stablecoin, PYUSD, as a means for facilitating instant and cost-effective transfers through their payment system. More recently, Stripe made an announcement on April 25th, sharing that merchants using their platform now have the ability to accept stablecoins for online transactions. From a crypto investor’s perspective, this development can lead to increased adoption and usage of stablecoins within these popular payment platforms.
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2024-05-06 22:48