News
How will it affect Bitcoin?
Arman Shirinyan
Stablecoins are gaining more volume and could beat Visa, but there is a problem
Continue reading U.TODAY
Google News
The rise of stablecoins has been nothing short of meteoric since 2017, and recent projections suggest they are set to surpass Visa in total payments volume (TPV) by the second quarter of 2024. This anticipated milestone highlights the significant role that stablecoins are starting to play in the global payments landscape, particularly in the cryptocurrency realm trade.
While Visa has long been a benchmark for measuring payment volumes, stablecoins are quickly filling the gap, thanks in large part to their growing use as the primary means of exchanging cryptocurrencies. Data shows that nearly 90% of stablecoin transactions are related to trading activity, including a notable portion attributed to wash trading, a practice that inflates trading volumes through repeated and coordinated buying and selling.
The predominant use of stablecoins in cryptocurrency commercial sector could make comparing their volume to traditional payment networks like Visa incorrect, as it primarily facilitates commercial and retail transactions. According to a Visa blog post, the utility of stablecoins is currently concentrated in the crypto ecosystem, particularly to facilitate quick and seamless transitions in and out of different cryptocurrencies.
Despite this, the enormous volume of transactions facilitated by stablecoins is impressive. Currently, stablecoins handle $265 billion in volume with an active user base of 27.5 million monthly active users (MAU). This averages out to about $9,600 per MAU.
Tether’s market capitalization stands at $110.86 billion, reflecting substantial market growth. This growing reliance on stablecoins, despite their primary use in trading, signals potential wider acceptance and integration into mainstream financial systems in the future.
About the author
Arman Shirinyan
Arman Shirinyan is a trader, cryptocurrency enthusiast and SMM expert with more than four years of experience.
Arman firmly believes that cryptocurrencies and blockchain will be in constant use in the future. Currently he focuses on news, articles with in-depth analysis of crypto projects and technical analysis of cryptocurrency trading pairs.