USDT And USDC Stablecoins Can Displace VISA, Mastercard, And Paypal In 2023 – Report
The emergence of cryptocurrency as an alternative finance tool has seen a rise in the use of stablecoins. Amid the decline in the price of most crypto assets on the market, stablecoins have witnessed increased transactions on most of the top trading platforms.
Stablecoins’ Settlements Performances
According to recently released data from Coin Metrics, the on-chain stablecoin settlement has seen a $7 trillion spike in 2022 and may likely increase before the end of the year. Conversely, the largest card payment solutions provider, Visa, has seen a yearly transaction volume of nearly $12 trillion.
However, the recent stablecoin metrics indicate that the fiat-pegged digital asset may soon overtake some of the leading card payments platforms or is likely to surpass them next year.
Commenting on the performance of stablecoin settlements, Peter Johnson, the co-founder of Brevan Howard Digital, explained that transactions involving stablecoins have already surpassed those involving Mastercard and American Express. He added that by 2023, stablecoin settlements could displace VISA as the leading payment solutions provider in the world.
Furthermore, Johnson noted that stablecoin transaction volume is about to outperform that of VISA and can outperform the combined aggregate value of the world’s leading card payment platforms. However, the co-founder disclosed that the stablecoin metrics do not involve on-chain transaction volume recorded by centralized exchanges, which also have different performance metrics.
Johnson’s comparison of stablecoin settlements and card payment providers involves their aggregate trading volume over a given period. But observers quickly point out that the comparison does not seem reasonable.
Critics also explained that Johnson failed to consider the distinction between credit card volume and stablecoin settlements, which are from different financial ecosystems. In this case, users utilize credit cards to pay for services, while stablecoins are fiat-pegged digital currencies used in cryptocurrency transactions.
Stablecoin Settlements: Can They Outperform Credit Cards?
Regulation is one negative factor hindering the use of stablecoins for transactions on multiple platforms. Unlike credit cards, stablecoin settlements apply to only a few payment systems.
On the other hand, consumers use credit cards like Mastercard and VISA daily to pay for utilities and services worldwide. Due to the absence of clear regulations regarding using stablecoins for payments, consumers will find it challenging to use fiat-pegged assets like USDT and USDC to pay for utilities like others do with traditional card payments.
The outgoing United States Senator, Pat Toomey, is working to change the use of stablecoins in the financial sector with a proposed bill for their regulation in 2023. Toomey’s new bill seeks to allow non-banks and non-state service providers to issue stablecoins to consumers.
However, the platforms must comply with the US Office of the Comptroller of Currency (OCC) guidelines before getting their approval. Meanwhile, the lawmaker wants his proposed bill to serve as the framework for the upcoming stablecoin regulations scheduled for next year.
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