Overview
Tether’s USDT and the Tron blockchain dominate the rapidly expanding stablecoin payment sector, according to an analysis by the firm Artemis, with support from the investment firms Dragonfly and Castle Island Ventures.
Key Findings
- A report titled “Stablecoin Payments from the Ground Up” analyzed data from 31 stablecoin payment companies.
- USDT was responsible for 90% of transaction volume, ahead of Circle’s USDC.
- The Tron network was the leading settlement network, managing about 60% of the volume handled, with Ethereum, Binance Smart Chain, and Polygon following.
Volume Snapshot
The stablecoin payment volume assessed in February indicated an annualized total of $72.3 billion, encompassing a wide range of payment types, including B2B, P2P, and lending.
Market Dynamics
Originally, stablecoins were mainly used as a safe haven for assets while trading cryptocurrencies. Now, these low-cost, instantly settled options are being adopted for broader payment applications. Institutions are forecasting significant market growth, both from crypto-native companies and major banks.
It comes as a surprise that the usage share of USDC isn’t larger given Circle’s active role in payments and their recent developments aimed at creating a cross-border payment network.
Circle, recently filing for an IPO on NYSE, has been gaining ground against Tether regarding issuance, yet the report indicated a disproportional volume use in payments with Tether, primarily routed through Tron and Ethereum.
This trend may be influenced by the substantial B2B transactions observed in regions with economic instability, where Tether has emerged as a favored choice for many.
User Preferences
Businesses leveraging stablecoin for transactions show little preference regarding the blockchain used for settlement. Tron’s efficiencies, combined with the presence of over $60 billion of USDT on its network, make this a pragmatic choice.
Concluding Remark
As Rob Hadick noted, “In regions like Argentina or Brazil, when referencing stablecoins, people tend to use Tether—it’s synonymous with their access to USD, akin to how Uber defines transportation in the U.S.”
