Visa, the international payments giant, has released a new study questioning the idea that the volume of stablecoin transactions is reaching levels seen in traditional payment networks.
Visa Questions the Reliability of Stablecoin Transactions
The global payment network, Visa, has cast doubt on the reliability of stablecoin transactions, going against the belief that they are gaining popularity compared to traditional monetary networks.
Distrust Attributed to Bot Activity
According to Cuy Sheffield, Visa’s head of crypto, “a large portion of stablecoin transactions on many blockchain networks are influenced by a lot of noise,” mainly due to automated bot activity.
Questioning Visa’s Methodology
To differentiate stablecoin transactions, Visa uses two metrics. First, the network focuses only on the largest amount of stablecoin transferred in a single transaction, disregarding smaller transactions resulting from complex smart contract interactions. Secondly, it employs an “inorganic user filter,” targeting transactions initiated by accounts that have conducted fewer than 1,000 stablecoin transactions and $10 million in transfer volume.
Challenging Visa’s Methodology
However, the crypto industry is not unanimously agreeing with Visa’s findings. The very use of this methodology is being called into question. Nick van Eck, co-founder of Agora, a startup specializing in stablecoins, questioned the validity of this data, noting that “it doesn’t make any sense as it would include trading firms, which are perfectly legitimate companies using these products.”
Ultimately, despite the initial enthusiasm for stablecoins as a future common currency, it seems that their adoption is not as flourishing and problem-free as one might have thought.