Visa Challenges Assumption on Stablecoin Turnover

International payment giant Visa has conducted a study that challenges the notion that stablecoin turnover is on par with traditional payment networks. Despite the growing popularity of stablecoins, Visa has raised concerns about the reliability of these transactions compared to traditional money networks.

Cuy Sheffield, Visa’s head of crypto, recently highlighted in a thread that a significant portion of stablecoin transactions on various blockchain networks are influenced by automated bot activities, leading to what he calls “a lot of noise.”

Visa’s approach to analyzing stablecoin transactions involves two key metrics. Firstly, they focus on the largest stablecoin amount transferred in a single transaction, excluding smaller transactions resulting from complex smart contract interactions. Secondly, they use an “inorganic user filter” to exclude transactions from accounts engaging in fewer than 1,000 stablecoin transactions and $10 million in transfer volume, targeting bot activity and transactions from large entities like centralized exchanges.

Pranav Sood, executive general manager for EMEA at Airwallex, noted that stablecoins are still in an early stage of evolution as a payment instrument. He emphasized the importance of improving existing payment rails in the short and mid-term.

While Visa’s findings have sparked debate in the cryptocurrency market, with some questioning their methodology, others believe that the data provided by Visa may not accurately represent legitimate businesses using stablecoins. Nick van Eck, co-founder of Agora, a startup specializing in stablecoins, expressed skepticism about Visa’s findings in a statement to DL News.

Visa’s study sheds light on the complexities surrounding stablecoin transactions and the need for further research and analysis in this evolving field.

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