Stablecoins outpace Visa by $1T for the first time! – What this shift means

• In 2024, stablecoins outpaced Visa in transaction volume. 
• Fed Chair noted that stablecoin legislation was a ‘good idea’ amid massive adoption. 

Stablecoin transaction volume surpassed Visa for the first time ever in 2024, according to a Bitwise report. 

In 2023, Visa transaction volume surged to about $13 trillion, while stablecoins logged $7 trillion. First forward in 2024, the annualized stablecoin volume doubled to nearly $14 trillion, while Visa surged marginally above $13 trillion. 

Source: Bitwise

What does it mean for crypto?

For context, stablecoins have the most viable crypto use cases, and cross-border payments, dominated by tradFi firms like Visa, could be the first segment ripe for disruption.

In fact, in February, Bitwise CEO Matt Hougan projected that stablecoins could dominate the $44 trillion cross-border payments.

“Stablecoins are going to dominate $44 trillion cross-border retail B2B transaction market within the next 5 years.”

Hougan cited renewed interest in launching or supporting stablecoins by PayPal, Fidelity, Stripe, Bank of America, and others as tell-tale signs of the upcoming adoption. 

Unlike volatile cryptocurrencies, stablecoins are backed 1:1 by reserve assets to maintain a ‘stable’ value tied to currencies like the US dollar or commodities like gold. So far, the most popular stablecoins are US dollar-based, led by Tether’s USDT and Circle’s USDC. 

According to the Bitwise report, the ongoing stablecoin legislation (two bills in the Senate and House of Representatives) could be passed by July. If so, this could drive further adoption at scale. 

The report added that the massive adoption could spill over into DeFi and the overall crypto space. 

“Growing stablecoin adoption will benefit adjacent sectors, including DeFi and other crypto applications.” 

In addition, Fed Chair Jerome Powell echoed similar sentiments, noting that stablecoin legislation was a ‘good idea’ amid increased mainstream adoption. 

As of April, Tether’s USDT dominated the stablecoin sector with $148B in market cap, followed by USDC’s $59B. 

Source: Artemis