WILL STABLECOIN VOLUMES SURPASS VISA THIS QUARTER?

According to research firm Sacra, stablecoins may surpass payment giant Visa in total payment volume this quarter, suggesting a significant shift in how payments are processed globally.

However, Visa’s head of crypto, Cuy Sheffield, counters this prediction. In a recent statement, Sheffield pointed out concerns regarding the data on stablecoin transactions, noting that much of it is influenced by bot activities and automated programs, which he argues do not equate to traditional settlement processes.

Sacra’s co-founder, Jan-Erik Asplund, in a blog post, highlighted the inherent advantages of stablecoins, particularly their effectiveness for cross-border transactions. Asplund emphasized that stablecoins offer convenience, speed, and cost-effectiveness, with transactions possible any day of the week and costing significantly less than traditional methods.

According to Sacra, major banks are increasingly integrating stablecoins into their payment systems, potentially pushing their total payments volume over $4 trillion.

Conversely, Visa has launched a dashboard that suggests up to 90% of stablecoin transactions in the past month did not involve actual users. In April, stablecoin transactions totaled around $2.2 billion, but Visa classified only about $149 billion of that as legitimate, attributing the rest to automated transactions by entities like centralized exchanges.

To refine its stablecoin transaction data, Visa collaborated with Allium Labs to develop an adjusted transaction metric. This metric aims to filter out non-genuine activities, including those by bots and automatic processes. Visa’s dashboard uses a single directional volume filter and an inorganic user filter to provide a more accurate representation of genuine transactions.

Despite these adjustments, the dashboard reported that total stablecoin transaction volume has nearly doubled since the start of 2024, predominantly in Tether and Circle’s USD Coin.

The evolution in the stablecoin space is also reflected by other payment giants like PayPal, which launched its PYUSD stablecoin in 2023, and Stripe, which recently began allowing merchants to accept stablecoins for payments. Additionally, Ripple announced its plans in April to introduce a U.S. dollar-backed stablecoin.

As of now, the stablecoin market capitalization stands at about $161 billion with a daily trading volume of $37 billion, according to CoinGecko.

Cointelegraph has reached out to Visa and major stablecoin issuer Tether for additional comments but has yet to receive a response.

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