- Stablecoin transfers have increased more than 16 times in the last four years, indicating their widespread use.
- According to Token Terminal, the monthly stablecoin transfer volume reached a record high of $1.68 trillion in April.
This volume was only $100 billion in October 2020. Over the previous four years, there has been a 16-fold growth.
Although the trend has been mostly upward, it’s important to note that in May 2024, there was a minor decline in the monthly transfer volume of stablecoins.
Stablecoins’ constantly rising market capitalization reflects investor trust as more and more money enters the market. All stablecoins put together now have a market valuation of almost $162 billion, up 24% from January 1st when it was only $130 billion.
Symbols
The increase in the volume of stablecoin transfers is caused by several variables. Stablecoins are a favorite option for many traders because they provide a hedge against cryptocurrency volatility.
Second, demand has been stimulated by the growing use of decentralized finance (DeFi) platforms, which frequently rely on stablecoins for transactional and liquidity provisioning.
Thirdly, the incorporation of stablecoins into conventional payment networks and financial systems has increased their usability and accessibility for daily applications. Stablecoins are being used by traditional financiers to circumvent traditional procedures by being used for individual disbursements like as salary and foreign payments.
Visa reports that stablecoin trading has increased dramatically recently, with almost $3.3 trillion changing hands per month. Payouts, merchant acceptance, and cross-border payments are the primary use cases.
Stablecoin regulations have been more transparent in a number of financial domains, which has improved user confidence. Additionally under discussion is a potential US stablecoin policy.
Stablecoins pose a number of risks, including those related to law, governance, operational resilience, money laundering, financing of terrorism, consumer protection, and effects on monetary policy and financial stability.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
