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Visa: Bots Drive 90% of Stablecoin Transactions


Bots account for a vast majority of stablecoin transactions, recent Visa research shows.

Fewer than 10% of these transactions come from genuine users, according to a new metric from Visa and Allium Labs, showing that just $149 billion of the $2.2 trillion in total transactions last month came from “organic payments activity.”

The findings were flagged in a report Sunday (May 5) evening by Bloomberg News, which also includes comments from Pranav Sood, executive general manager for Europe, the Middle East and Africa at payments platform Airwallex.

“It says that stablecoins are still in a very nascent moment in their evolution as a payment instrument,” Sood said in reference to the data. “That’s not to say that they don’t have long-term potential, because I think they do. But the short-term and the mid-term focus needs to be on making sure that existing rails work much better.”

He added that his company has seen muted demand for stablecoin-based payments solutions, with many not seeing the technology as user-friendly.

“It’s a really significant barrier to overcome,” Sood told Bloomberg.

“It’s important to remember that in the U.S., people are still using checks to pay for somewhere between 40% and 60% of business payments, which gives you a sense of where the market really is in terms of technological adoption.”

Stablecoins are a form of cryptocurrency designed to maintain a stable value by tying their worth to a fiat currency, such as the U.S. dollar or the euro, or assets like gold or commodities.

PYMNTS examined their potential as a payments method last month following the debut of the Visa/Allium platform.

“Unlike traditional cryptocurrencies like bitcoin, which are notorious for their price fluctuations, stablecoins offer a level of stability that closely mirrors that of traditional currencies,” PYMNTS wrote. “Their immediate benefits for businesses include their ability to streamline cross-border transactions, as well as to serve as a new tool for managing liquidity more efficiently.”

That report, which acknowledges that the widespread adoption of crypto into the payments sphere is a moment that is yet to happen, also points out a number of recent initiatives to boost the use of stablecoins.

For example, Stripe announced last month it was reentering the cryptocurrency payment space following a six-year hiatus and aims to begin supporting global stablecoin payments as soon as this summer.

Meanwhile, PayPal and cross-border money transfer service Xoom recently teamed to let users make international transactions using PayPal’s USD stablecoin, which the company launched last summer.

In April, blockchain and cryptocurrency company Ripple unveiled its own plans to launch a dollar-pegged stablecoin.