According to Bloomberg, Visa has developed an adjusted stablecoin metric in collaboration with Allium Labs. This metric is designed to provide a more accurate representation of the stablecoin market by eliminating potential distortions caused by inorganic activity and other artificial inflationary practices. The data from this new metric reveals that Circle's USDC has been gaining market share since the beginning of 2024. Last week, USDC recorded a transaction volume of $456 billion, significantly higher than Tether's USDT, which recorded $89 billion. Furthermore, USDC accounted for 50% of total transactions since January.
This data contradicts the common perception that Tether's USDT is the dominant stablecoin in the industry, given its 68% share of coins in circulation compared to USDC's 20%, as per DefiLlama data. Stablecoins are cryptocurrencies that aim to maintain a steady price in line with a fiat currency, typically the US dollar. They are used by traders to move funds in and out of tokens and for payments, including cross-border remittances.
Public blockchains provide data on stablecoin transactions, but it can be challenging to interpret. As Cuy Sheffield, head of crypto at Visa, explains, 'stablecoins can be used across a range of use cases with transactions that can be initiated manually by an end user or programmatically through bots.' When transactions linked to bots are removed, the total transfer volume over the 30 days prior to April 24 fell from $2.65 trillion to $265 billion.
The rise of USDC comes after Circle faced challenges during the US banking crisis last year. The total value of USDC in circulation dropped from a high of $56 billion to $23 billion in December 2023, following Circle's disclosure of a $3.3 billion exposure to the failed Silicon Valley Bank. However, the value has since rebounded to $32.8 billion, according to DefiLlama data.
