Stablecoin Adoption Sees 15% Surge as Number of Holders Inches Close to 100M

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The usage of stablecoins is rapidly increasing, as shown by the significant rise in the number of wallets holding them. Based on information from rwa.xyz, this figure has surged by 15% in 2023, reaching an all-time high of more than 93.6 million.

Digital assets that hold a one-to-one value with external references such as the US dollar can be categorized into three primary groups: Fiat-collateralized, cryptocurrency-collateralized, and algorithmic stablecoins.

Among all stablecoins currently available, Tether (USDT) stands out as the most widely held with approximately 80% of all stablecoin users holding USDT. USDC and BUSD come in second place, each held by a significant number of stablecoin users. As of now, there are 35 stablecoins in existence, collectively valued at over $157 billion. Notably, Tether’s market capitalization amounts to $114.07 billion.

The number of stablecoin addresses, which don’t change frequently, has grown, accompanied by a rise in the number of addresses actively transferring stablecoins. In March alone, over 26 million such addresses were identified, marking a new high and suggesting increased engagement from retail investors. Most of these transactions occurred on TRON and Binance Smart Chain (BSC).

Simultaneously, although TRON and BSC have more active addresses than Ethereum and Solana, they trail behind in the amount of transfers taking place.

Growing Use Cases

The number of addresses holding stablecoins has consistently increased over the past few months. This trend persisted even during the 2022 crypto market downturn, which seemed unfavorable to such growth.

Based on the assessment of experts, this expansion might be attributed to heightened investor demand for less volatile assets. Given the quick succession of rate increases by the Federal Reserve during that period.

In addition, the Federal Reserve reported in 2022 that the usage of stablecoins was on the increase. Some applications for these digital currencies include facilitating cross-border transactions, transferring funds between entities, and managing liquidity within organizations.

In addition, flexible digital assets have various uses based on their location in the world. For example, a country like Zimbabwe, which faces high inflation, can employ stablecoins for transactions, remittances, and as valuable assets to hold. On the other hand, more economically stable countries may utilize stablecoins to buy cryptocurrencies.

According to rating agency S&P, a clear regulatory framework could motivate banks to employ stablecoins. In related news, US Senators Cynthia Lummis and Kirsten Gillibrand have introduced a detailed 179-page bill proposing regulations for stablecoins.

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2024-04-24 18:15