Stablecoin settlements were on par with payments giant Visa during 2022 Stablecoin settlements were on par with payments giant Visa during 2022

Stablecoin settlements were on par with payments giant Visa during 2022

Stablecoins settled more than $11 trillion in value during 2022, rivaling payments giant Visa's $11.6 trillion settled.

Stablecoin settlements were on par with payments giant Visa during 2022

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

Stablecoins are making significant waves in the payments sphere, primarily as a vehicle for non-speculative transactions, according to a new report by European hedge fund Brevan Howard.

In 2022, the stablecoin market settled an eye-watering value of over $11 trillion, drawing parallels to payments giant Visa’s annual figure of $11.6 trillion and overshadowing the numbers posted by Paypal and Mastercard during the year.

Paypal processed a total volume of $1.4 trillion during the year, while Mastercard reported settling a total of $6.57 trillion.

Adoption and Volume

Brevan Howard’s study, spearheaded by Peter Johnson and Sai Nimmagadda, dove deep into non-speculative stablecoin activities across prominent blockchains like Ethereum, Tron, and Binance Smart Chain (BSC). The research unveiled that over 25 million blockchain addresses held more than $1 in stablecoins.

The stablecoins at the heart of the study were chiefly fiat-backed, including USDT, USDC, BUSD, and TUSD. Bank deposits, U.S. Treasuries, and other liquid cash counterparts underpin these digital assets. The report found that these fiat-backed stablecoins accounted for a majority of the non-speculative activities.

The report also highlighted that the majority of stablecoin users in 2022 likely belonged to the small or retail category. An estimated 75% of weekly active stablecoin addresses conducted transactions amounting to less than $1000.

Additionally, the report revealed that stablecoin usage is not tied to patterns witnessed in crypto exchange volumes. Stablecoin volumes only dipped 11% since December 2021, while broader centralized and decentralized exchange volumes plunged 64% and 60%, respectively.

When stacking up against giants like PayPal, stablecoins outperformed, with

Diversification and Dominance

Although Ethereum settled a significant percentage — 50% — of all stablecoin volumes, it only contributed to 3% of total transactions, predominantly due to its lofty transaction fees.

Conversely, Tron and BSC combined powered 75% of all stablecoin transactions — equating to 41% of the total volume.

Tether’s USDT emerged as the uncontested leader in 2022, commanding roughly 69% of the total stablecoin supply. It comprised 80% of weekly active addresses and 75% of the transaction pie during the year.

Despite the success in 2022, stablecoins are trailing behind Mastercard year-to-date in 2023, primarily due to crypto market cycles and a challenging U.S. regulatory climate.

However, Brevan Howard’s projections suggest that stablecoins might surpass Bitcoin users within five years, driven by payment integrations and groundbreaking innovations.

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