Bloomberg: Less Than 10% of Stablecoin Transactions Are ‘Organic’

Over 90% of stablecoin volume is moved by non-human users, indicating limited use of cryptocurrencies as a payment method, according to Bloomberg.

The agency interpreted data from a new indicator by Visa and Allium Labs. The tool identifies transactions made by bots and large traders, distinguishing them from those by real people. 

According to Visa, in April, out of a total transaction volume of $2.2 trillion, only $149 million was considered ‘organic payment activity’.

“This suggests that stablecoins are still in the early stages of their evolution as a payment tool,” noted Airwallex regional manager Pranav Sood.

He believes that cryptocurrencies still have potential, but in the short to medium term, focus should be on improving existing tools. 

Citing research by Glassnode, Bloomberg noted that the record $3 trillion market capitalization of the crypto market in November 2021 “was actually closer to $875 billion”.

Visa’s head of digital assets, Cuy Sheffield, emphasized that stablecoin transactions are often double-counted depending on the receiving platform. He explained that converting 100 USDC from Circle to PYUSD from PayPal on the decentralized exchange Uniswap would increase the on-chain volume by $200.

Sood added that Airwallex observes moderate client demand for stablecoin-based payment solutions, as many still do not find the technology convenient enough to use.

“In the US, people still use checks for 40-60% of business payments, which gives an idea of where the market really is in terms of technology adoption,” added the top manager. 

On April 19, the combined market capitalization of US dollar-pegged stablecoins rose to $165.2 billion, a level last seen in June 2022. One of the growth drivers was interest in the ‘synthetic dollar’ USDe from Ethena Labs. 

In August, analysts at Bernstein predicted that the capitalization of stablecoins would grow to $2.8 trillion over the next five years. 

In March, the rating agency S&P Global Ratings released an assessment of the leading stablecoins. None of the nine assets studied received the highest rating.