- Visa and Allium have launched a new data dashboard that reveals nearly all stablecoin transactions are tied to “inorganic activity.”
- The dashboard tracks Tether’s USDT, Circle’s USDC, Paxos’s USDP, and PayPal’s PYUSD, all of which are pegged 1:1 to the U.S. dollar.
- Visa’s data analysis was conducted in response to a Coin Metrics chart claiming that stablecoins were catching up with established settlement networks.
Visa and Allium unveil a data dashboard that reveals over 90% of stablecoin transactions are automated, casting a new light on the role of stablecoins in the crypto market.
Visa and Allium Launch Data Dashboard
Payments giant Visa and enterprise blockchain data provider Allium have launched a new data dashboard designed to track and analyze stablecoin transactions. The tool aims to remove potential distortions arising from inorganic activity and other artificial inflationary practices. The adjusted figures reveal that more than 90% of tracked transactions occur without human involvement, challenging the perception of stablecoins’ role in the market.
Stablecoins Under the Lens
The dashboard tracks Tether’s USDT, Circle’s USDC, Paxos’s USDP, and PayPal’s PYUSD, all of which are pegged 1:1 to the U.S. dollar and backed by cash or cash-like reserves. Visa’s analysis does not attribute the “inorganic activity” to any particular stablecoin, but the comparison between adjusted and unadjusted figures highlights the infrequency of human-initiated stablecoin payments. For instance, Visa reported $51.6 billion worth of stablecoin transactions processed on May 5, but after adjusting for inorganic activity, the figure dropped to $4.6 billion.
Response to Coin Metrics Chart
Visa’s data analysis was conducted, at least in part, in response to a Coin Metrics chart circulating on Twitter, which claimed that stablecoins were catching up with established settlement networks. Cuy Sheffield, Visa’s head of crypto, argued that transactions initiated by smart contracts without explicit human involvement aren’t directly comparable to those handled by traditional payment processors. He pointed out that automated bot programs performing activities such as stablecoin arbitrage, liquidity provision, and market making are crucial for sustaining the growing decentralized finance (DeFi) ecosystem, but their on-chain transactions don’t resemble settlement in the traditional sense.
Conclusion
The data dashboard launched by Visa and Allium provides a new perspective on the role of stablecoins in the crypto market. By revealing the high level of automated transactions, it challenges the perception of stablecoins’ role and usage. It also underscores the need for more nuanced metrics and analyses in understanding the complex dynamics of the crypto market.
