Stablecoins Outshine Mastercard and PayPal in Transaction Volume

Over the past 3 years, altcoins have shown better performance than traditional payment networks like Mastercard, PayPal, or Visa, according to cryptocurrency analyst Chris Burniske.

Chris Burniske, the co-founder of Placeholder, a New York-based venture firm specializing in crypto assets, explains that despite the bear market experienced by cryptocurrencies in 2022 after the collapse of FTX and other cryptocurrency firms, the stablecoins operating on various layer 1 blockchains recorded transactions worth $6.87 trillion, surpassing Mastercard and PayPal, according to analyst Jamie Coutts.

This explains why PayPal recently launched a stablecoin pegged to the dollar (PYUSD) and announced plans to launch a cryptocurrency hub, so that users can store and exchange their stablecoin for other digital currencies from their PayPal account.

Stablecoins are gaining ground against traditional finances

While the exponential growth in stablecoin transactions has been remarkable, even surpassing the transaction volumes of the world’s most important and widely used traditional networks like Mastercard in 2022, with more than $6,878 trillion in transactions, they still only represent between 0.5% and 3% of the throughput or processing capacity of these conventional payment networks, as indicated by Coutts.

However, compared to the transaction volume processed by Visa and Bitcoin, altcoins are still far from winning the battle, as the traditional giant processed over $11,607 trillion in 2022, representing more than 40.75% of the transactions processed in stablecoins.

It’s worth mentioning that Bitcoin was the unrivalled winner in transaction volume in 2022, with $15,092 trillion.

Stablecoin adoption continues to grow

As Coutts explained, stablecoin adoption has outpaced even that of Bitcoin and Ethereum in recent years. Since 2021, stablecoin addresses with balances exceeding $1 have grown nearly 7 times faster than Ethereum addresses with a similar balance.

“But in recent years, stablecoin adoption has begun to outstrip that of Bitcoin and Ethereum. Since 2021, stablecoin addresses with over $1 have risen at about 7x the rate of Ethereum addresses with an equivalent value balance.”

This trend highlights the surge and adoption that stablecoins have experienced in recent years, with a growth rate that seems quite promising. Of course, if other collapses like that of UST are avoided, Terra’s stablecoin eliminated around $45 billion from the crypto ecosystem by losing parity with the dollar.

Burniske concluded his tweets by emphasizing “the irony of blockchains making fiat more useful to the world.” However, he recognized that despite all the use and efficiency of stablecoins, it could be beneficial for the end consumer. Who knows, it might help drive the crypto adoption that cryptocurrency creators dream of.

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