Total Stablecoin Transactions Surged to $10 Billion in August
In August, total stablecoin transactions escalated to a value of $10 billion, marking a significant increase from the $6 billion recorded in February.
U.S. Passes GENIUS Act for Stablecoin Regulation
The United States enacted the GENIUS act in July, establishing a federal framework for the issuance, trading, and custody of stablecoins through a bipartisan bill. This legislation has spurred an influx of new stablecoin launches from major financial services firms as well as potential ventures by various companies and government entities.
GENIUS Act Linked to Surge in Stablecoin Usage
A report from Artemis, a blockchain firm, highlights the connection between the GENIUS act’s passage and the subsequent boom in stablecoin activity. However, it also notes that usage had already been steadily growing prior to the legislation. According to Artemis, stablecoin payment volumes more than doubled year-over-year in August and could reach $122 billion annually if trends continue.
Businesses Embracing Stablecoins for B2B Transactions
A key finding from the Artemis study is that business-to-business (B2B) payments have surpassed peer-to-peer (P2P) transactions as the leading use case. B2B payment volumes surged 113% since February and now constitute about two-thirds of the stablecoin market.
Stablecoins Boosted by GENIUS Act
This surge in B2B activity is likely tied to the GENIUS act, as it makes a regulated U.S. stablecoin market more appealing for organizations. A separate Ripple study indicates that many financial leaders are open to using stablecoins within the next three years, with about one-third already incorporating them into their daily operations.
The top use cases identified were cross-border payments, trade settlement, and serving as an alternative to traditional banks.
Stablecoins Enhance Cross-Border Payments
Stablecoins are often seen as a solution to the inefficiencies of cross-border payments due to their immediate settlement, low fees, full visibility, and stable value. This feature has driven many financial services firms to launch or consider launching stablecoin initiatives.
Zelle, for instance, which is owned by seven major U.S. banks, recently explored plans to introduce a stablecoin that could expand its reach beyond the borders of the United States.
Stablecoin Expansion via Cross-Border Functionality
The cross-border capability is one of the primary reasons for the launch or consideration of stablecoins by financial services organizations. Adding a stablecoin to Zelle’s product offerings could enable it to extend its user base internationally, as users do not necessarily need a bank account to participate.
