This year has been a massive downward trend for the crypto market, but stablecoin usage and adoption are still increasing.
Stablecoin adoption has grown quickly in 2022 despite crypto markets crashing more than 70%. According to CoinMetrics, the total value settled by them in 2021 was just over $6 trillion. In 2022, the value settled could top $8 trillion, maybe more.
On Dec. 21, co-head of venture at Brevan Howard Digital, Peter Johnson, compared the stablecoin settlements to those of leading credit cards.
He noted that stablecoin settlements had already surpassed MasterCard and American Express. Furthermore, he predicted that on-chain stablecoin volumes would surpass those of Visa next year.
“In 2023, on-chain stablecoin volumes will surpass the largest card network, Visa.”
Dollar-Pegged Asset Usage Surging
Johnson added another prediction that next year’s stablecoin volumes will “also likely surpass the aggregate volume of all four major card networks (Visa, Mastercard, AmEx, and Discover).”
However, there is a difference between credit card volumes and stablecoin settlements. Credit card transactions usually indicate consumer spending, whereas fiat-pegged crypto assets are primarily used for crypto trading and decentralized finance.
With that in mind, the surge in settlement volumes for stablecoins is even more impressive. Once they are regulated and can be used for payments, that volume will skyrocket.
Stablecoins currently account for around 16.5% of the entire crypto market capitalization. According to CoinGecko, there is $140 billion in all of them combined.
Tether remains the king of the crop, with a 47% market share and 66.3 billion USDT circulating. Circle is second with a market share of 31% and 44.3 billion in UDSC. Combined, the pair make up almost 80% of the entire stablecoin market. However, both have seen their circulating supply decrease this year as the bear market bites deeper.
Stablecoin Trust Act Submitted
In a final act before retirement, pro-crypto Republican Senator Pat Toomey has submitted a stablecoin trust bill. On Dec. 21, he said:
“I hope this framework lays the groundwork for my colleagues to pass legislation next year safeguarding customer funds without inhibiting innovation.”
The bill proposes authorization for licensed entities such as money transmitters and banks to issue them. It also wants to do away with the draconian reporting requirements and classify stablecoins as non-securities.
Furthermore, it is way more constructive than Elizabeth Warren’s ideas about regulation. The bill aims to outlaw all financial privacy and force nodes and validators to register as “financial institutions.” Senator Sherrod Brown has gone a step further, suggesting the entire asset class should be banned in the United States.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.