Visa reveals 90% of stablecoin transactions come from bots and big traders

A
recent
study
conducted
by
Visa
and
Allium
Labs
suggests
that
the
vast
majority
of
stablecoin
transactions
are
initiated
by
bots
and
large-scale
traders,
not
genuine
users.

The
dashboard,
designed
to
isolate
transactions
made
by
real
people,
found
that
out
of
approximately
$2.2
trillion
in
total
stablecoin
transactions
in
April,
only
$149
billion
originated
from
“organic
payments
activity.”

The
same
study
said
that
USDC,
the
stablecoin
issued
by
Circle,
has

outpaced
Tether’s
USDT
stablecoin
in
volume.
Notably,
on-chain
analysis
from
Nansen
revealed
that
the
overall
volume
for
stablecoins
have

surpassed
Visa’s
2023
monthly
average.

Visa’s
study
directly
challenges
the
arguments
of
stablecoin
proponents,
who
claim
that
these
tokens
are
revolutionizing
the
payments
industry,
which
is
currently
valued
at
$150
trillion.

Despite
support
and
optimism
from
financial
technology
firms
such
as

PayPal
and

Stripe,
the
data
suggests
that
the
adoption
of
these
tokens
as
a
genuine
payment
instrument
is
still
in
its
early
stages.

“[…]
stablecoins
are
still
in
a
very
nascent
moment
in
their
evolution
as
a
payment
instrument,”
says
Pranav
Sood,
executive
general
manager
for
EMEA
at
payments
platform
Airwallex.

Sood
opines
that
it
is
possible
for
stablecoins
to
have
“long-term
potential”
but
its
short-term
and
mid-term
focus
“needs
to
be
on
making
sure
that
existing
rails
work
much
better.”

Data
from
Glassnode
indicates
that
the
record
$3
trillion
of
total
market
circulation
assigned
to
digital
tokens
at
the
peak
of
the
2021
bull
market
was
closer
to
$875
billion
in
reality,
pointing
to
a
gap
between
nominal
and
“real”
value
between
digital
assets.

Glassnode
also
published
a

Q2
report
in
which
it
claimed
that
stablecoin
network
velocity,
a
measure
of
how
quickly
value
moves
around
its
network,
is
nearing
0.2
on
an
aggregated
scale.
This
means
that
20%
of
the
total
stablecoin
supply
is
processed
in
transactions
daily.

The
issue
of
double-counting
stablecoin
transactions
is
also
a
concern.
Cuy
Sheffield,
Visa’s
head
of
crypto,

explained
that
converting
$100
of
Circle
USDC
to
PayPal’s
PYUSD
on
the
decentralized
exchange
Uniswap
would
result
in
$200
of
total
stablecoin
volume
being
recorded
on-chain.

Visa,
which
handled
more
than
$12
trillion
worth
of
transactions
last
year,
is
among
the
companies
that
could
potentially
lose
out
should
stablecoins
become
a
widely
accepted
means
of
payment.
Analysts
at
Bernstein
predicted
that
the
total
value
of
all
stablecoins
in
circulation
could
reach
$2.8
trillion
by
2028,
an
almost
18-fold
increase
from
their
current
combined
circulation.