This year has been a huge downtrend for the crypto market, but stablecoin usage and adoption is still on the rise.
Stablecoin adoption has grown exponentially in 2022, despite a more than 70% drop in crypto markets. According to Coinmetrics, the total value set by them in 2021 was over $6 trillion. In 2022, the fixed value could exceed $8 trillion, maybe even more.
On December 21, Co-Head of Enterprise at Braven Howard Digital, Peter Johnson, compared stablecoin settlements to major credit cards.
He added that the stablecoin settlement has already surpassed Mastercard and American Express. Furthermore, he predicted that the amount of stablecoins on-chain would exceed that of Visa in the next year.
“In 2023, the volume of on-chain stablecoins will surpass that of the largest card network, Visa.”
Dollar-pegged asset usage surging
Johnson made another prediction that next year’s stablecoin volume will “surpass even the combined volume of all four major card networks (Visa, Mastercard, MXN and Discover) combined.”
However, there is a difference between credit card volume and stablecoin settlement. Credit card transactions typically indicate consumer spending, while fiat-pegged crypto assets are primarily used for crypto trading and decentralized finance.
With this in mind, the growth in the settlement volume of the stablecoin is even more impressive. Once they become regulated and can be used for payments, that volume will skyrocket.
Stablecoins currently account for around 16.5% of the entire crypto market capitalization. All of these together amount to $140 billion, according to CoinGecko.
With 47% market share and 66.3 billion USDT in circulation, Tether remains the king of the crop. Circle is second with a market share of 31% and 44.3 billion in UDSC. Overall, the pair accounts for about 80% of the entire stablecoin market. However, both have seen their circulating supply decrease this year as the bear market deepens.
Stablecoin Trust Act Submitted
In one final act before retirement, pro-crypto Republican Senator Pat Toomey has introduced a stablecoin trust bill. On 21 December he said:
“I hope this framework will lay the groundwork for my colleagues to pass legislation next year that protects client funds without stifling innovation.”
The Bill proposes to authorize licensed entities such as money transmitters and banks to issue them. It also seeks to do away with draconian reporting requirements and classify stablecoins as non-securities.
Furthermore, it is far more constructive than Elizabeth Warren’s ideas about regulation. The bill aims to prevent all financial secrecy and register nodes and validators as “financial institutions”. Senator Sherrod Brown has gone a step further, suggesting that the entire asset class should be banned in the United States.
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