Visa, a global leader in payments, has released a new study challenging the idea that stablecoin transactions are reaching the same levels of adoption as traditional payment networks.
Expressing doubts about the reliability of stablecoin transactions, Visa questions the widespread belief that they are becoming as popular as traditional money networks.
Cuy Sheffield, Visa’s crypto chief, suggested in a recent discussion on X that a significant portion of stablecoin transactions on various blockchain platforms are influenced by “a lot of noise,” largely due to automated bot activities.
Visa’s method of distinguishing stablecoin transactions relies on two key metrics. Firstly, it focuses solely on the largest stablecoin transfers within individual transactions, excluding smaller transfers resulting from complex smart contract interactions.
Secondly, it employs an “inorganic user filter,” targeting transactions initiated by accounts engaging in fewer than 1,000 stablecoin transactions and $10 million in transfer volume.
“This eliminates various bot activity as well as automatic transactions from large entities like centralized exchanges,” Visa stated.
In a statement to Bloomberg, Pranav Sood, executive general manager for EMEA at payments platform Airwallex, observed that data indicates stablecoins “are still in a very early stage of their evolution as a payment instrument.” He suggested that in the short and medium term, the market should focus on “ensuring that existing payment systems operate much more efficiently.”
However, not everyone in the cryptocurrency market agrees with Visa’s conclusions, questioning their methodology. Nick van Eck, co-founder of Agora, a startup specializing in stablecoins, stated to DL News that the data “does not make sense because it would then include trading firms, which are completely legitimate businesses using these products.”
Summary Review: Visa’s recent study challenges the widespread belief that stablecoin transactions are rapidly approaching the same levels of adoption as traditional payment methods. By highlighting concerns about the reliability of these transactions and identifying potential sources of “noise,” such as automated bot activities, Visa suggests that stablecoins may not yet have achieved the same level of popularity as traditional money networks. Visa’s methodology for analyzing stablecoin transactions, including focusing on the largest transfers and employing an “inorganic user filter,” aims to ensure a more accurate assessment of their usage. However, this perspective is not universally accepted within the cryptocurrency community, with some questioning the validity of Visa’s findings. While stablecoins continue to evolve as a payment instrument, stakeholders in the market may need to prioritize efforts to improve existing payment systems for more efficient operation in the short and medium term. Despite varying opinions on the current state of stablecoin adoption, ongoing research and dialogue are essential for understanding and navigating the rapidly changing landscape of digital currencies.
Disclaimer: Remember that nothing in this article and everything under the responsibility of Web30 News should be interpreted as financial advice. The information provided is for entertainment and educational purposes only. Investing in cryptocurrency involves inherent risks and potential investors should be aware that capital is at risk and returns are never guaranteed. It is imperative that you conduct thorough research and consult with a qualified financial advisor before making any investment decision.
