The global stablecoin supply is reportedly down 2.7% from a peak on Aug. 30, but is now expected to pick back up as digital token prices continue to climb higher as we get closer to the US elections. This, according to research report from OurNetwork.
The comprehensive report noted that relatively lower stablecoin supply over the last 60 days is correlated with the “decline of PayPal’s PYUSD, which was supported by liquidity incentives across a number of Solana DeFi protocols.”
The research report added that at its peak, “lending PYUSD was earning almost 20% APY on Kamino Finance compared to just 7.9% today.”
But zooming out we can see the drop in supply “looks insignificant compared to the 100x in stablecoin supply since early 2019 — current stablecoin market cap stands at $170.93B.”
The research study from OurNetwork added that euro-pegged stablecoins are rising with Circle’s EURC supply “up more than 40% in the last month.”
Base has been the primary network to benefit, “with EURC’s value on the chain going from $22M to $48M.”
The research report from OurNetwork pointed out that this “coincides with Coinbase’s efforts to meet MiCA compliance, which it has highlighted as a differentiator against competitors.”
The extensive research study shared recently by OurNetwork pointed out that banking institutions have traditionally “been reluctant to issue stablecoins.”
However, Societe Generale’s EURCV, which is an Ethereum (ETH)-based stablecoin and currently the only bank-issued one, “rose 11% to reach a $41.7M market cap this month.”
Societe Generale has announced plans to “launch EURCV on Solana as well.”
This, alongside BBVA’s stablecoin partnership with Visa, is “a sign banks may finally be more active.”
The research report released by OurNetwork stated that Bridge, which the payments giant Stripe acquired this week, “isn’t the only high-growth stablecoin business around.”
The research study also noted that “rising tokenholder and transfer activity shows increased adoption of Sling Money, a cross-border payment app built using USDP, a stablecoin issued by Paxos, which also issues PayPal’s PYUSD Solana.”
Since the start of June, the number of USDP token holders “on Solana has risen from 33 to 1,212 while the monthly transfer volume has risen from $111,426 to $839,199.”
The report from OurNetwork added that USDC’s transaction volume had peaks reaching “nearly $200B in late 2022 during periods of high market activity.”
The report further noted that Ethereum now “maintains the largest share of transaction volume, though Layer 2 solutions like Arbitrum have captured increasing portions since 2023.”
The research report also stated that the “pattern shows cyclical behavior with peaks roughly every 3 to 4 months, indicating regular periods of peak activity.”
The research report also mentioned that volumes have decreased from 2022, but current levels of “around $80 to $100B represent a substantial increase from the pre-2021 era.”
Transaction activity surged from “under 2M daily in early 2021 to peaks of over 20M in late 2023, with notable Q4 growth on Arbitrum, Base, and Solana. Layer 2s and alternative chains are capturing more activity, reducing Ethereum’s dominance. Current levels of ~12M daily transaction suggest ecosystem maturity.”
Distribution of USDC transactions across blockchains “shows distinct patterns.”
The report pointed out that Solana leads in total count, “mostly for amounts under $100, while Ethereum is dominant for large transactions over $1M. Layer 2s capture mid-sized transactions between $1k and $100k, indicating chain specialization as users choose based on size and cost.”
The report also noted that users are seemingly unafraid to send USDC in nine figure clips, “even on Ethereum Layer 2s.”
The report also revealed that Tether’s growth is accelerating. This, as Q3 of this year reportedly “welcomed 36M new accounts, the best quarter yet for the stablecoin behemoth.”
With 768M issued in the first 6 months, USDT‘s growth on TON is the “fastest of any stablecoin on any chain to-date.”
The in-depth crypto and blockchain ecosystem research report notably claims that as much as “67% of all USDT on Tron is held “outside of the top 500 accounts, showing the widespread distribution of the stablecoin on the blockchain.”
For reference, the report pointed out that the figure was “just 49% end of 2023, and 57% end of Q2 2024.”