- Over 90% of stablecoin activity comes from bots and traders, not everyday payments.
- Lack of user-friendliness is a major barrier to wider adoption of stablecoins.
- Tracking real crypto activity with blockchain data is difficult, leading to inflated figures.
A new study by Visa and Allium Labs shares the idea of stablecoins becoming widely used for everyday transactions. The study reveals that a staggering majority (over 90%) of stablecoin activity stems from bots and large-scale traders, not real people.
To measure genuine use, Visa developed a metric that excludes bot activity. This metric showed that only a tiny fraction, roughly $149 billion out of $2.2 trillion in total transactions in April, originated from real users. This finding contradicts the optimistic view of stablecoin proponents who believe these tokens will revolutionize payments.
Proponents highlight the benefits of stablecoins, such as instant settlement and minimal fees. However, experts suggest user-friendliness is a major hurdle. Additionally, tracking real crypto activity using blockchain data is inherently difficult, leading to inflated figures.
Financial technology giants like PayPal and Stripe are still exploring stablecoins. However, this study suggests these tokens have a long way to go before becoming a major force in the payments industry. Despite potential advantages, user adoption and data transparency remain significant challenges.
Further complicating the picture, some experts worry that the dominance of bot activity could create artificial price inflation for stablecoins. This in turn could also discourage legitimate users from entering the market and would create a monopoly in the market making less users for the limited real-world adoption.
Ethereum which is the world’s leading smart contract blockchain network, witnessed a massive surge in stablecoin volume last month in April. According to data the surge reached unexpected levels. This surge also includes flash loan activity, which also soared the figures.
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