Could stablecoin volumes overtake Visa this quarter?
|Stablecoins may finally overtake payment giant Visa in total payment volume this quarter, according to research firm Sacra.
Visa’s head of crypto, however, disagrees.
In a blog post by Sacra co-founder Jan-Erik Asplund, the firm argued that stablecoins’ “extreme product-market fit for cross-border money movement” could see its total payments volume exceed Visa and reach over $4 trillion.
“Stablecoins win on convenience, enabling cross-border payments to be completed any day of the week (rather than business days only), on speed (in minutes rather than 6 to 9 hours), and cost ($0.0037 vs. $12),” Asplund argued.
“Today every major bank is working on using stablecoins to run their payment rails behind the scenes,” he added.
Source: Sacra
Visa’s head of crypto, Cuy Sheffield, disagrees, arguing there was a “lot of noise” with stablecoin data and that on-chain transactions resulting from interactions with bots and automated programs “don’t resemble settlement in the traditional sense.”
Visa’s recently launched dashboard claims that as much as 90% of stablecoin transactions over the last 30 days have not been made by genuine users.
The total volume of stablecoin transactions in April was around $2.2 billion. However, less than 10% of that volume ($149 billion) has been classified as genuine by the credit company, with bot activity and automated transactions by entities such as centralized exchanges accounting for the rest.
Visa collaborated with Allium Labs to develop an adjusted stablecoin transaction metric for the dashboard, which was announced in late April.
“This adjusted metric aims to remove potential distortions that can arise from inorganic activity and other artificial inflationary practices,” states the company on its dashboard.
Daily stablecoin transaction volume adjusted and unadjusted. Source: Visa/Allium
The dashboard applies two filters to its stablecoin data: a single directional volume filter that only counts the largest stablecoin amount transferred within a single transaction and an inorganic user filter that aims to remove bot activity and automatic transactions from large entities like centralized exchanges.
The dashboard, however, reports that the total monthly stablecoin transaction volume, spurious or otherwise, has almost doubled since the beginning of 2024, most of which is in Tether (USDT $1.00) and Circle’s USD Coin (USDC $1.00).
Meanwhile, other payment giants are getting in on the act. PayPal launched its PYUSD stablecoin in 2023, and Stripe said that it would allow merchants using its platform to accept stablecoins for online transactions in April.
Also in April, Ripple announced plans to launch a United States dollar-backed stablecoin to compete with market leaders.
Current stablecoin market capitalization is around $161 billion, and daily trading volume is $37 billion, according to CoinGecko.
Cointelegraph reached out to Visa and leading stablecoin issuer Tether for further comments but did not receive an immediate response.
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