Billions of dollars in stablecoin transactions
Visa, the global leader in international payments, has released a groundbreaking study challenging the notion that stablecoin transactions are reaching the same level of popularity as traditional payment networks. The company’s head of crypto, Cuy Sheffield, recently expressed concerns on a popular forum, suggesting that a significant portion of stablecoin transactions on various blockchain networks are influenced by automated bot activities, creating what he calls “a lot of noise.”
To differentiate between stablecoin transactions, Visa employs two key metrics. Firstly, it focuses solely on the largest stablecoin amount transferred in a single transaction, excluding smaller transactions that result from complex smart contract interactions. Secondly, it utilizes an “inorganic user filter” that targets transactions initiated by accounts with fewer than 1,000 stablecoin transactions and $10 million in transfer volume.
In response to Visa’s findings, Pranav Sood, executive general manager for EMEA at payments platform Airwallex, stated in a Bloomberg commentary that stablecoins are still in the early stages of their evolution as a payment instrument. He suggested that the market should prioritize improving the existing payment infrastructure in the short-term and mid-term.
However, not all participants in the cryptocurrency market agree with Visa’s research, raising concerns about its methodology. Nick van Eck, co-founder of Agora, a startup specializing in stablecoins, argued that the data “makes no sense” as it includes trading firms that are legitimate users of these products.
As the debate continues, the Aave community plans to conduct a thorough review of small-cap stablecoins on the Aave V2 platform, further exploring the potential of these digital assets.
