Over 90% of Stablecoin Transaction Volumes Are Not From Genuine Users: Visa Study

A recent study conducted by Visa and Allium Labs has found that more than 90% of stablecoin volumes do not originate from genuine users.,The findings challenge the notion that stablecoins, which are cryptocurrencies pegged to a specific asset like the US dollar, are on the verge of revolutionizing the $150 trillion payments industry, according to a Monday 
report from Bloomberg
. ,The joint dashboard developed by Visa and Allium Labs aims to filter out transactions initiated by bots and large-scale traders 
in order to
 isolate those made by real individuals. ,


The data from April indicates that out of approximately $2.2 trillion in total transactions, only $149 billion can 
be attributed
 to “organic payments activity” conducted by genuine users.,The study’s results suggest that stablecoins are still in the early stages of their evolution as a payment instrument. ,“That’s not to say that they don’t have long-term potential because I think they do,” Pranav Sood, the executive general manager for EMEA at payments platform Airwallex, said. ,Accurately tracking the 
real
 value of crypto activity using blockchain data has always been a challenge. ,For instance, data provider Glassnode estimated that the record $3 trillion market circulation assigned to digital tokens during the peak of the 2021 bull market was 
actually
 closer to $875 billion.,


Stablecoin transactions often face the issue of double-counting, depending on the platform to which users transfer funds. ,Cuy Sheffield, Visa’s head of crypto, told Bloomberg that converting $100 of Circle Internet Financial’s USDC to PayPal’s PYUSD on the decentralized exchange Uniswap would result in $200 of total stablecoin volume 
being recorded
 on-chain.,Visa, a company that handled over $12 trillion worth of transactions in 2020, is among the entities that could potentially lose out if stablecoins become widely accepted as a means of payment.,Analysts at Bernstein predicted that the total value of all stablecoins in circulation could reach $2.8 trillion by 2028, representing an almost 18-fold increase from their current combined circulation. ,Advocates of stablecoins argue that their near-instantaneous transactions and low costs make them ideal for disrupting the payments sector.,In an effort to
leverage stablecoins, PayPal introduced its PYUSD stablecoin last year to facilitate instant and lower-cost transfers within its payment infrastructure.,Similarly, Stripe 
announced on April 25
 that it would allow merchants using its platform to accept stablecoins for online transactions.,The company is starting with USDC stablecoins on the Solana, Ethereum, and Polygon blockchains.,However, Airwallex has observed limited demand for stablecoin-based payment solutions from its customers, as many still do not perceive the technology as user-friendly enough, according to Sood. ,“It’s a really significant barrier to overcome,” he said. ,Organic Payment Activity Accounts for a Portion of Stablecoin Volume