Alliance Bernstein has published a research report on crypto addressing the stablecoin market. Authored by Gautam Chhugani and Mahika Sapra, the report shares that annualized transfers of stablecoins are around $6.8 trillion.
While Tether (USDT) and Circle (USDC) dominate the dollar-based stablecoin market and most transfers are for on/off-boarding on crypto marketplaces, global payments, and transfers seem to be where stablecoins are heading as they can provide an immediate, low-cost global transfer of value.
Stablecoin usage is benefiting as more platforms are seeing benefits for transfers as opposed to legacy payment rails.
Interestingly, SOL or Solana is the blockchain leading for stablecoins and cross-border payments, claiming 43% of value. Ethereum, once the top dog, is in second place.
At the same time, scalability remains a concern as Solana would need to gear up to become a dominant consumer payments provider. Of course, things change daily.
Laurent Descout, CEO and co-founder of Neo, commented on the stablecoin market.
“Stablecoins are becoming an increasingly viable payment option for goods and services in the real economy. Many see the huge potential that they could bring from bypassing the inefficient and slow processes of traditional payments to the increased security, recordkeeping and transparency.
“While it’s too early to say if stablecoins will eventually replace traditional forms of payments, treasurers need to start preparing. They should read up and stay abreast of the latest developments and start having conversations about their viability and digital wallets which allow them to hold and utilise them. Those who don’t, risk being left behind.”
What is missing for stablecoins, at least in the US, is a clearly defined regulatory environment. In 2021, the US Department of Treasury issued a report that worried about the potential for stablecoins to be used for illicit activity as well as prudential concerns. Congress has attempted to pass legislation to tackle this sector of digital assets, but has failed. At least so far.
