In a recent analysis titled “The Relentless Rise of Stablecoins,” Brevan Howard Digital delved deep into the world of stablecoins, revealing some astonishing figures.
The report highlighted that in 2022, on-chain stablecoin transactions reached a staggering $11 trillion, nearly matching Visa’s transaction volume of $11.6 trillion. This comparison, although not entirely analogous, underscores the growing significance of stablecoins in the financial ecosystem.
The research, which was based on blockchain transaction data, found that approximately five million stablecoin addresses were active weekly. Interestingly, three-quarters of these addresses transacted less than $1,000 per week.
This suggests that the majority of stablecoin users are likely small or retail users. While many of these transactions are financial in nature, a significant portion also represents real-world uses such as peer-to-peer payments.
However, the report also highlighted a potential concern regarding the authenticity of the data, especially given the dominant role of the Tron blockchain in stablecoin transactions.
The data revealed that Tron, along with the Binance Smart Chain (BSC), accounted for a whopping 75% of all stablecoin transactions and 41% of the total volume. Most chains, with the exception of Tron and BSC, predominantly use USDC. In contrast, Tron and BSC are more inclined towards Tether (USDT). One of the reasons behind this could be the association of USDC with Coinbase, while Tron and BSC have affiliations with other exchanges.
The report further emphasized the dominance of Tether on the Tron blockchain, with its issuance nearing $43 billion, which is 52% of all USDT stablecoins. A speculative explanation for this massive balance and the number of wallets on Tron is its significant user base in China, a claim supported by Tron’s founder, Justin Sun.
However, the report also touched upon some controversies surrounding Sun, including allegations of manipulative wash trading of TRX to artificially inflate its price.
Such trading often involves the use of a stablecoin, which could potentially inflate stablecoin transaction volumes.