DBT Bureau
Bengaluru, 7 May
The emergence of stablecoins as a valid alternative to traditional payment instruments in the coming days has come under the radar as a recent study finds that over 90% of stablecoin transactions are not from real users.
A study by Visa and Allium Labs revealed that nearly all stablecoin transactions are from bots and large traders and not from genuine users. These findings have raised questions about the potential of stablecoins revolutionizing the payment sector despite the optimism seen among industry players.
Stablecoins are a type of cryptocurrency that is backed by a specific asset for maintaining a stable value. Usually, the value of a stablecoin is pegged to the price of another asset, such as a country’s currency. If the stablecoin is pegged to the US dollar, its value will be $1.
Some of the biggest stablecoins by market value are Tether (USDT), the Gemini Dollar (GUSD), USDC (USDC), True USD (TUSD), and Paxos Standard (PAX) among others.
Though stablecoins are not immune from volatility, it is relatively stable than other cryptocurrencies as their value is pegged to an asset class. Therefore, many market analysts have predicted that it holds the potential to revolutionise the payment system.
PayPal launched its PYUSD stablecoin last year. Stripe said on April 25 that it’s allowing merchants using its platform to accept stablecoins for online transactions.
