Tens of billions in stablecoin transactions ‘inorganic,’ Visa says

International payments giant Visa has unveiled a new study that challenges the assumption that stablecoin turnover is approaching levels seen in traditional payment networks.

Visa, a global payment network, has expressed concerns about the reliability of stablecoin transactions, challenging the widespread belief that they are becoming as popular as traditional money networks.

Cuy Sheffield, head of crypto at Visa, made a suggestion. last topic x It is stated that a significant portion of stablecoin transactions on many blockchain networks are affected by “too much noise”, mainly due to automated bot activity.

3/ We found that there can be a lot of noise in stablecoin data, given that it can be used in a variety of use cases, with transactions that can be initiated manually by the end user or programmatically via bots.

— Cuy Sheffield (@cuysheffield) April 25, 2024

Visa’s methodology for distinguishing between stablecoin transactions is based on two metrics. First, it only focuses on the largest amount of stablecoins transferred in a single transaction, excluding smaller transactions resulting from complex smart contract interactions.

Visa’s investigation into stablecoin activities | Source: Visa

Second, it uses an “inorganic user filter” that targets transactions initiated by accounts that have processed fewer than 1,000 stablecoin transactions and have less than $10 million in transfer volume.

“This eliminates various bot activities as well as automated transactions from large organizations such as centralized exchanges.”

Visa

Pranav Sood, general manager of EMEA at payment platform Airwallex, said in a comment to Bloomberg that the data suggests that stablecoins are “still in a very nascent phase in their evolution as a means of payment” and added that this is the case in the short term. In the medium term, the market needs to focus on “making sure the existing tracks work much better.”

However, not everyone in the cryptocurrency market accepts Visa’s findings and questions their methodology. Nick van Eck, co-founder of Agora, a startup specializing in stablecoins, told DL News that the data “makes no sense because it would then take into account trading firms that are completely legitimate businesses using these products.”