Over 90% of stablecoin transactions do not originate
from real users, a recent study by Visa and Allium Labs revealed. These
findings raise questions about the potential of stablecoins revolutionizing the
payment sector despite the optimism from industry leaders and the overall positive market
sentiment.
Stablecoin Potential in Payments
Out of a staggering $2.65 trillion in total stablecoin transactions in the past 30 days, a mere $265 billion is attributed to “organic
payments activity,” highlighting the prevalence of non-user transactions.
This data was highlighted in a dashboard aimed at analyzing stablecoin
transactions to differentiate between authentic user activity and artificial
volume.
This revelation challenges the narrative that
stablecoins, tethered to assets like the dollar, are on the brink of
transforming the payment industry, a notion supported by fintech giants like
PayPal and Stripe. Despite the bullish sentiments expressed by industry
leaders, including John Collison of Stripe, the data underscores the nascent
stage of stablecoins as a viable payment instrument, Bloomberg reported.
While the potential for stablecoins to disrupt the
payments sector is acknowledged, practical hurdles remain. Airwallex’s Pranav
Sood highlights the imperative of enhancing existing payment infrastructure to
facilitate seamless adoption. Moreover, user-friendly interfaces are crucial,
with many consumers still favoring traditional payment methods due to ease of
use.
Despite the challenges, analysts predict a significant
surge in stablecoin circulation in the coming years, with the potential for the
total value to reach $2.8 trillion by 2028. Recently, Stripe made a comeback into the
cryptocurrency space after exiting the sector six years ago. However, this
time, the payment firm is embracing stablecoins to facilitate transactions and
minimize risks.
Institutional Stablecoin Adoption
Stripe’s decision to use stablecoins marks a
departure from its previous foray into crypto, which was marred by volatility
and technical challenges. Stablecoins, such as Circle’s USDC, offer a
predictable value, mitigating the sharp fluctuations associated with
traditional cryptocurrencies like Bitcoin.
During a recent presentation, Stripe’s Co-Founder and
President, John Collison, demonstrated a seamless crypto payment using USDC,
emphasizing its stability and suitability for online transactions.
Reflecting on their earlier experience with Bitcoin
payments, Collison acknowledged the shortcomings, labeling it as a “pretty
terrible payment experience.” However, this time around, Stripe is betting
on stablecoins to provide a more reliable and user-friendly payment solution.
Stripe’s resurgence in the crypto realm comes at a
time when the company is experiencing exponential growth in payment volumes,
surpassing $1 trillion. With clients, including industry giants like Zara and
Ford, Stripe continues to solidify its position in payment processing.
This article was written by Jared Kirui at www.financemagnates.com.
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