After a first benchmark report published in 2022, the digital assets arm of a16z* has just shared its second report, which highlights the important place stablecoins are taking globally. The report is exciting as it shares a wealth of information on transaction volumes, how the blockchain infrastructure has grown, “builder energy”, dashboards integrating thousands of data points, and more.
Among the 7 key takeaways from the report, point 3 focuses on how stablecoins, those specific crypto-currencies backed by currencies such as the euro or the dollar, are seeing their use rise.
Here’s what you need to know:
A resounding success
Stablecoins accounted for $8500 billion in trading volumes across 1.1 billion transactions in Q2 2024. Stablecoin transaction volumes more than doubled Visa’s $3900 billion in transactions over the same period. Stablecoins now account for almost a third of daily usage of cryptocurrencies at large, at 32%, just behind decentralized finance (DeFi) at 34%.
A specific and essential use
The stablecoin business is now decoupled from volatile cryptos. This is hardly surprising, given that stablecoins enable fast, cheap and global payments. This gives them a key role as both the safe-haven and exchange value of digital currencies, making them indispensable.
Low transaction costs
Major upgrades in recent months have considerably reduced the cost of executing transactions. For example, on the Ethereum blockchain, transactions involving USDC (part of the 15 eco Account assets) now cost $1, compared with an average of $12 in 2021. This is even less than $0.01 on Base, a Layer 2 chain linked to Ethereum. On the international bank transfer side, the classic cost is an average of $44.
An underlying movement
Stablecoins are not just a fad. In fact, the number of monthly stablecoin mailing addresses has continued to rise, even as spot crypto-currency trading volumes have declined. In other words, people seem to be using stablecoins for more than just trading.
To read the full report, follow this link https://a16zcrypto.com/posts/article/state-of-crypto-report-2024 and in particular section 4 on stablecoins here: https: //a16zcrypto.com/posts/article/state-of-crypto-report-2024/#section–4
*a16z is a venture capital fund investing in crypto and web3 startups. It has more than $7.6 billion in committed capital across multiple funds and has been investing in web3 since 2013, led by founding general partner Chris Dixon at Andreessen Horowitz.
