Although stablecoins are a relatively new invention in the cryptocurrency space, they have become quite popular with those who use cryptocurrencies for payments. Most preferred of all is the Tether USDT, which according to a Messari investigator It may have the potential to replace Bitcoin as the dominant currency in public blockchains.
Its number of daily transactions continues to grow rapidly and has almost reached that of Bitcoin. The USDT monetary base grew by $ 2.4 billion to exceed $ 8 billion. In the second quarter, it grew by another $ 3.8 billion, bringing its total base to more than $ 12 billion. USDT contributed the most to the total transaction volume of stablecoins as it is very popular, probably because it was the first to be created.
$ 144 billion in stablecoin transactions settled in the second quarter
Stable coins are cryptocurrencies pegged to fiat currencies like the USD, which give them significant stability and reduced volatility associated with cryptocurrencies. As a result, merchants find them more attractive for daily transactions instead of Bitcoin, for example. Currently, a large percentage of transactions are carried out using different stable currencies and the annual volume of transactions has grown steadily since 2016.
In the second quarter of 2020 alone, $ 144 billion worth of transactions were made using these stablecoins. Furthermore, they represent 40% of all cryptocurrency transactions in recent months. This new trend of interest in stablecoins may not stop soon due to the growth of decentralized finance, also known as DeFi.
Stablecoins boost transaction volume on Ethereum
The second largest cryptocurrency by market cap, Ethereum is known as the platform for decentralized finance. It holds 65% of all stablecoins issued and represents 85% of all transactions involving stablecoins. Ethereum's daily liquidation value recently surpassed that of Bitcoin and this growth coincides with the burgeoning market for stablecoins of which Ethereum has the bulk.
DeFi is still experiencing significant growth and the spread of stablecoins is also not slowing down. The two tend to feed each other, in which case unprecedented growth still awaits the industry. This could place the highest stable USDT on the path to becoming the most widely used digital currency for transactions on public blockchains as early as next year, taking into account the growth rate in transaction volume.