Stablecoin Transactions Largely Inorganic, Finds New Study

By: Isha Das

A new study, involving Visa and Allium Labs, has uncovered that less than 10% of stablecoin transaction volumes are organic, contradicting a popularly held belief among stablecoin proponents. The research reveals that a large proportion of transactions are initiated by bots and large-scale traders. Visa and Allium labs have constructed a dashboard designed to differentiate between these bot generated transactions and those made by real users.

In the month of April, out of approximately $2.2 trillion in total transactions, only $149 billion was determined to be 'organic payment activity' according to Visa. The findings provide a realistic picture of the stablecoin market and its potential as a transformative force in the $150 trillion payments industry.

A variety of major fintech companies including PayPal and Stripe have been investigating the possibilities offered by stablecoins. However, existing obstacles in the payment infrastructure pose a significant barrier, emphasizing the requirement for incrementally improving the existing system while acknowledging the long-term potential of stablecoins. John Collison, Stripe co-founder, has expressed optimism about the technical advancements linked to these tokens.

Despite the new data, some industry experts are predicting a massive surge in stablecoins in the coming years. Bernstein's analysts have estimated that the total value of all circulating stablecoins could reach $2.8 trillion by 2028, exhibiting a nearly 18-fold increase from their current combined circulation. The report indicates the need for a continued focus on user-friendly solutions in the stablecoin space to truly unlock its potential.