- Stablecoin transaction volumes may appear larger than Visa’s, but experts warn they’re often inflated by bots, flash loans, and wash trades.
- Unlike Visa’s real consumer payments, much of stablecoin activity lacks genuine economic value.
Recent headlines tout a major milestone for the cryptocurrency world: stablecoin transactions in 2024 reportedly outpaced Visa’s annual volume, hitting a staggering $13.5 trillion. But as the hype grows, so does the skepticism. Industry experts are urging caution, warning that much of this volume may be inflated by bots, wash trades, and flash loans—activities that lack real economic value.
Chamath Palihapitiya, CEO of Social Capital, recently claimed that stablecoins now move more money weekly than Visa, citing $464 billion in average weekly volume. The comparison suggests a tipping point in global payments. However, critics argue that such metrics are misleading.
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Unlike Visa, where each swipe typically represents a real purchase, stablecoin transactions often involve repeated transfers between wallets—many of which are controlled by the same entity. Joe, an advisor at Maven 11 Capital, noted that on fast, low-fee blockchains like Solana, a trader can generate over $130 million in volume with just $100,000 and a few dollars in fees. The ease of moving funds back and forth means the same capital can be recycled multiple times, creating the illusion of high activity.
Dan Smith of Blockworks Research adds that flash loans—instant, collateral-free loans repaid within a single transaction—can further exaggerate volume without any actual money changing hands in a meaningful way. These tools make it possible to inflate numbers without reflecting real-world usage.
The issue is compounded by widespread wash trading and bot-driven arbitrage. Chainalysis estimates that billions in on-chain volume may be attributed to such manipulative practices, particularly involving ERC-20 and BEP-20 tokens. Visa, on the other hand, processes real consumer spending—dining out, online shopping, bills—not artificial churn.
Rajiv from Framework Ventures summed it up bluntly: stablecoin volume is a “useless metric” without proper context. While stablecoins may hold promise for the future of payments, comparing their volume directly with traditional networks like Visa risks misleading both investors and the public.
Bottom line: Transaction volume alone doesn’t tell the full story. When it comes to stablecoins, it’s worth asking—not just how much is moving, but why.