Visa, in collaboration with enterprise blockchain data provider Allium, has unveiled a new data dashboard aimed at addressing the issue of "inorganic activity".
Visa, in collaboration with enterprise blockchain data provider Allium, has unveiled a new data dashboard aimed at addressing the issue of "inorganic activity" and artificial inflationary practices in stablecoin transactions. The dashboard tracks transactions of major stablecoins such as Tether (USDT), USDC, USDP and PayPal's PYUSD, all of which are pegged 1:1 to the U.S. dollar and maintain reserves to back their tokens, either in cash or cash-like assets such as U.S. Treasury bonds.
According to the companies' analysis, nearly 90% of tracked stablecoin transactions occur without human involvement. For instance, on May 5, the unadjusted figures show $51.6 billion worth of stablecoin transactions processed. However, when the data is adjusted to remove inorganic activity, the number drops significantly to $4.6 billion.
In response to a Coin Metrics chart suggesting that stablecoins were catching up with established settlement networks, Cuy Sheffield, Visa's head of crypto, emphasized that transactions initiated by smart contracts, without explicit human involvement, are not directly comparable to traditional payment processor transactions.
Sheffield explained that automated bot programs can carry out activities such as stablecoin arbitrage, liquidity provision, and market making. However, the resulting on-chain transactions from these automated programs differ from traditional settlement processes. Visa found that the adoption of USDC has grown significantly over the past eight months. In September 2023, USDC accounted for 23% of the stablecoin transactions analyzed, and by the end of the year, its usage had more than doubled, surpassing 50% of all stablecoin transactions.
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