Stablecoins Are The True Killer App of Crypto, Says Peter Johnson

• Co-Head of Venture Investments at Brevean Howard Digital Peter Johnson hails stablecoins like Tether and USDC as the crypto “killer app”.
• Stablecoins offer efficient, low-cost transactions, decoupling from crypto market volatility, and expanding beyond early adopters.
• While Tether dominates, competition from USDC and others may erode profit margins, but stablecoins remain a gateway to crypto for mainstream users.

According to Co-Head of Venture Investments at Brevean Howard Digital Peter Johnson, stablecoins like Tether (USDT) and USD Coin (USDC) are evolving into the “killer app” of cryptocurrency. In a recent video interview with Anthony Pompliano, Johnson analyzed data showing relentless growth in stablecoin adoption despite market conditions.

While volatility limits cryptocurrencies like Bitcoin for payments, Johnson argues stablecoins offer efficient, low-cost transactions that are attractive to users worldwide. This unique value proposition is driving rapid stablecoin growth.

Active wallet addresses sending stablecoins continue setting new highs, decoupling from speculative exchange volumes in bear markets according to Johnson. Stablecoin transactions increasingly occur for non-trading purposes as user bases expand beyond crypto’s early adopters.

Johnson attributes the trend to infrastructure improvements enabling seamless dollar transfers globally. Fintech apps built specifically for stablecoins also broaden access for underbanked groups.

Additionally, he mentioned that Tether maintains dominance with its first-mover advantage, high liquidity, and traction in emerging markets. But rivals like USDC are capturing share through redemptions into fiat dollars. For now, stablecoin issuers earn sizable profits on spreads. However, Johnson expects competition to erode margins over time. Staking rewards could further disrupt the space.

While U.S. regulators eye stricter stablecoin rules, Johnson believes CBDCs pose little threat to private offerings, especially for retail usage. He advocates for regulation and provides standardized guidance.

Additionally, Johnson also spoke about how financial institutions interact with stablecoins. He mentioned that stablecoins are used to move money between exchanges and fund investments in Brevan Howard Digital. He also added that stablecoin adoption is more outside the US and that the statistics often end up as surprising for the people in the US.

Johnson sees stablecoins as a gateway into crypto, not a hindrance to assets like Bitcoin. Their payment capabilities attract new users, who may then explore speculative investments. Stablecoins are maturing into the most compelling blockchain use case for the mainstream.