Stablecoins are gaining significant traction in the payment landscape for non-speculative transactions, according to a report by Brevan Howard, a European hedge fund. In 2022, stablecoins facilitated transactions exceeding $11 trillion, surpassing the volumes of payment giants like Visa, Paypal, and Mastercard. Brevan Howard’s study examined stablecoin activities on major blockchains, revealing that over 25 million blockchain addresses held more than $1 in stablecoins.
The study focused on fiat-backed stablecoins such as USDT, USDC, BUSD, and TUSD, which are underpinned by assets like bank deposits and U.S. Treasuries. These stablecoins predominantly drove non-speculative activities.
Most stablecoin users in 2022 were likely retail users, with around 75% of weekly active addresses conducting transactions below $1000.
Interestingly, stablecoin usage didn’t parallel trends in crypto exchange volumes; while stablecoin volumes decreased only 11%, exchange volumes dropped significantly by 64% and 60% for centralized and decentralized exchanges, respectively.
In terms of performance, stablecoins outperformed major players like PayPal in terms of diversification and dominance. Ethereum handled 50% of stablecoin volumes but contributed just 3% to total transactions due to high fees. On the other hand, Tron and Binance Smart Chain accounted for 75% of stablecoin transactions, constituting 41% of total volume.
Tether’s USDT dominated 2022, commanding about 69% of the total stablecoin supply, 80% of weekly active addresses, and 75% of transactions throughout the year.
Although stablecoins are currently trailing Mastercard’s performance in 2023 due to market cycles and regulatory issues, Brevan Howard’s projections suggest that stablecoins might surpass Bitcoin users within five years due to payment integrations and innovative developments.
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