- Nearly all stablecoin transactions are tied to inorganic activity like arbitrage, liquidity provision, and market making by smart contracts or bots, according to Visa and Allium’s data analysis.
- Visa’s adjusted data shows that over 90% of tracked stablecoin transactions on platforms like Ethereum, Tron, and Solana occur without direct human involvement.
- USDC usage has experienced significant growth in the past eight months, surpassing 50% of all stablecoin transactions analyzed by Visa since December 2023.
Stablecoins like Tether and USDC are supposed to be pegged 1:1 to the US dollar. New data reveals that upwards of 90% of their transactions occur without any human initiating the payments. Instead, smart contracts and bots are behind nearly all activity.
The Data Behind Stablecoin Inorganic Activity
Payments giant Visa and blockchain data provider Allium have launched a dashboard that filters out inorganic stablecoin transactions. On Sunday, May 5, it showed that only $46 billion of $516 billion worth of transactions were initiated by humans. Visa says developers create automated bots that perform arbitrage, liquidity provision and market making – important for DeFi but not resembling traditional payments.
Why Visa Is Concerned About Comparisons to Settlement Networks
Visa analyzed stablecoin data partly in response to a chart suggesting stablecoins are catching up to settlement networks like Visa. But Visa’s Cuy Sheffield argues smart contract transactions without human involvement are not directly comparable. The on-chain transactions from interacting with automated programs don’t resemble traditional settlement.
The Rise of USDC
According to Visa, USDC has seen marked growth recently. In September 2023, USDC was used for 23% of analyzed transactions but exceeded 50% in December and 60% in February. USDC now accounts for the majority of stablecoin payments.
Conclusion
The data reveals the scale at which smart contracts and bots drive stablecoin transactions without humans, calling into question comparisons between stablecoins and traditional payments. Stablecoin activity is vital for DeFi but differs from conventional settlement.
