Stablecoin Surge Exceeds MasterCard and American Express

Despite the crypto market turmoil of 2022, stablecoins set a new record total settlement volume this year, beating out every major credit card provider except for Visa, according to data from CoinMetrics.

While trade volume trended down for most leading crypto assets, stablecoins executed $7.4T worth of transactions in 2022, up from $6T in 2021. 

Transactions

According to Peter Johnson, formerly of Jump Crypto, the stablecoin sector beat out top credit card companies including Mastercard with $2.2T in volume, American Express with $1T volume, and Discover with $200B. Only Visa drove more volume than stable tokens, settling $12T worth of transactions in 2022.

Stablecoin volume is up more than 600% in two years, with the asset class driving just $1T worth of transactions in 2020.

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CoinMetrics’ data shows that the adoption of Tether (USDT), the top stablecoin by market cap, is stagnating while its top rival, USD Coin, and other stable tokens are gaining market share. 

USDC ranked second for 2022 with roughly $2.9T, more than double its settlement volume for 2021. USDT volume dropped to $3.5T this year after tagging $3.7T in 2021.

Trade Volume

The combined volume of the seven other stablecoins tracked by CoinMetrics also increased by around 30% from $1T last year.

By contrast, the trade volume of other leading crypto assets is down more than 90% across the board.

Stablecoins comprise about 18% of the total crypto market cap.

Coinbase, the top U.S. exchange, said the performance of stablecoins is a healthy signal for the broader crypto asset class.

 “Not only does it mean that market participants are willing to remain digitally native during a market downturn, but it also represents a significant amount of dry powder sitting on the sidelines that can be deployed when investor confidence returns,” Coinbase said in its 2023 Crypto Markets Outlook report.

“Stablecoins are now one of the largest sectors in the crypto ecosystem with an outsized role in storing and transferring wealth.”

Meaningful Share

Coinbase said it expects stablecoins adoption to grow over the long-term and that stablecoins native to popular DeFi protocols may become a meaningful share of the market.

Leading DeFi protocols Curve and Aave are both working toward launching native stable tokens that can be minted using their respective dApps.