Visa Study Reveals Majority of Stablecoin Transactions (90%) Are Not Genuine: Impact on Crypto Coins Like Tether (USDT)

  • A recent study by Visa and Allium Labs reveals that over 90% of stablecoin transaction volumes are not from genuine users, challenging the notion of stablecoins revolutionizing the payments industry.
  • Out of approximately $2.2 trillion in total transactions in April, only $149 billion can be attributed to “organic payments activity” conducted by genuine users.
  • Stablecoin transactions often face the issue of double-counting, depending on the platform to which users transfer funds.

A recent study by Visa and Allium Labs has found that over 90% of stablecoin transaction volumes are not from genuine users, challenging the potential of stablecoins in the payments industry.

Organic Payment Activity Accounts for a Portion of Stablecoin Volume

The data from April indicates that out of approximately $2.2 trillion in total transactions, only $149 billion can be attributed to “organic payments activity” conducted by genuine users. The study’s results suggest that stablecoins are still in the early stages of their evolution as a payment instrument. “That’s not to say that they don’t have long-term potential because I think they do,” Pranav Sood, the executive general manager for EMEA at payments platform Airwallex, said. “But the short-term and the mid-term focus needs to be on making sure that existing rails work much better.”

Stablecoin Volume Faces Double-Counting Issue

Stablecoin transactions often face the issue of double-counting, depending on the platform to which users transfer funds. Cuy Sheffield, Visa’s head of crypto, told Bloomberg that converting $100 of Circle Internet Financial’s USDC to PayPal’s PYUSD on the decentralized exchange Uniswap would result in $200 of total stablecoin volume being recorded on-chain. Visa, a company that handled over $12 trillion worth of transactions in 2020, is among the entities that could potentially lose out if stablecoins become widely accepted as a means of payment.

Conclusion

Despite the challenges, advocates of stablecoins argue that their near-instantaneous transactions and low costs make them ideal for disrupting the payments sector. However, the adoption rate is still low, with many perceiving the technology as not user-friendly enough. As the market continues to evolve, the role of stablecoins in the payments industry remains to be seen.

BREAKING NEWS

VANECK FILED AN UPDATED VERSION OF ITS SPOT SOLANA ETF S-1 APPLICATION

VANECK FILED AN UPDATED VERSION OF ITS SPOT SOLANA...

ETHEREUM DAT ETHZILLA SELLS $40M ETH FOR STOCK BUYBACKS: Link

ETHEREUM DAT ETHZILLA SELLS $40M ETH FOR STOCK BUYBACKS:...

Solana’s Bitwise SOL Staking ETF (BSOL) Goes Live on Oct 28 with Direct SOL Staking and 100% Spot SOL

On October 28, Multicoin Capital managing partner Kyle Samani...

Solana (SOL) Bitwise SOL Staking ETF to List on Oct 28 as Kyle Samani Deletes Tweet — Reason Unclear

COINOTAG News reports that Multicoin Capital Managing Partner Kyle...

Huang Licheng Increases HYPE Long to 88,000 Coins and ETH Long to 2,450 ETH, Highlighting Major Unrealized Gains

COINOTAG News, citing HyperInsight data dated October 28, shows...
spot_imgspot_imgspot_img

Related Articles

spot_imgspot_imgspot_imgspot_img

Popular Categories

spot_imgspot_imgspot_img