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Stablecoins Struggling to Gain Genuine Traction, Visa Study Reveals
Ruholamin Haqshanas
Last updated:
May 6, 2024 06:27 EDT
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2 min read
A groundbreaking study conducted by the dynamic duo of Visa and Allium Labs has uncovered a startling reality about the world of stablecoins. Their findings suggest that more than 90% of the staggering $2.2 trillion in stablecoin transactions do not originate from genuine, everyday users.
This revelation challenges the long-held belief that stablecoins, those cryptocurrencies pegged to physical assets like the mighty US dollar, are poised to revolutionize the $150 trillion payments industry. As Bloomberg’s report lays bare, the reality seems to paint a different picture.
The joint dashboard developed by Visa and Allium Labs has masterfully separated the wheat from the chaff, filtering out the transactions initiated by bots and high-volume traders. This surgical approach has revealed that a mere $149 billion of that colossal $2.2 trillion can be attributed to “organic payments activity” carried out by real individuals.
“That’s not to say that they don’t have long-term potential because I think they do,” muses Pranav Sood, the executive general manager for EMEA at the payments platform Airwallex. But the study’s results suggest that stablecoins are still very much in their infancy as a payment instrument.
Accurately tracking the true value of crypto activity has always been a challenge, with Glassnode estimating that the record $3 trillion market circulation during the 2021 bull market was actually closer to a more modest $875 billion.
Stablecoin transactions also face the pesky issue of double-counting, as Visa’s Cuy Sheffield explains. A simple transfer from USDC to PayPal’s PYUSD on Uniswap can result in a whopping $200 being recorded on-chain, despite the original value being just $100.
This revelation poses a potential threat to Visa, a company that handled over $12 trillion worth of transactions in 2020. As stablecoins gain traction, they could disrupt the payments sector that Visa has long dominated.
However, Airwallex’s Sood cautions that many customers still perceive stablecoin-based payment solutions as lacking in user-friendliness, a “really significant barrier to overcome.”
The future of stablecoins remains uncertain, but this Visa-Allium study has certainly blown the lid off the notion that they are on the verge of transforming the payments landscape. The journey to genuine mainstream adoption appears to be a long and winding road.