Can stablecoins deliver payment success?

IN FOCUS

In today’s newsletter, we look at:

• The rise of crypto payments in the real world
• The ups and downs of stablecoins

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Hi there,

There are many stories of regret in the cryptoverse. I myself missed out on Ethereum when it was still under US$1, and the friend who introduced me to it had his bitcoins stolen in a hack.

But the king of regrets has to be Laszlo Hanyecz, more commonly known as the “Bitcoin Pizza Guy.” In 2010, he spent 10,000 BTC on two pizzas from a Papa John’s store in Florida. Those bitcoins would be worth US$670 million today.

The crypto community hasn’t been kind to Hanyecz, saying he should have held onto the tokens. It’s worth pointing out, however, that digital currencies weren’t created as a get-rich-quick scheme. That came only later with the arrival of staking and hodling.

Cryptocurrencies were made with the idea of making transactions easier and cheaper. But the explosive rise in crypto prices – Bitcoin’s value, for example, grew 506% in 2010 alone – and the ensuing volatility ended any realistic chance of crypto being used for payments, at least until recently.

–Scott

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Crypto payments get real, but how mainstream can it go?

Today’s Big Story delves into the increasing options that allow crypto holders to spend their tokens on everything from hotel rooms to sneakers. Singapore-based Dtcpay, which facilitates digital currency use for consumers and merchants, logged a 400% increase in transaction volume between January and August.

Triple-A, another digital payment provider headquartered in Singapore, is on track to more than double year-over-year transaction volumes.

Most transactions don’t involve free-floating tokens like Bitcoin and Ethereum. Instead, many customers today are using stablecoins such as USDT (Tether) and USD Coin (USDC).

The instability of stablecoins

Many people predicted that mass adoption of stablecoins would finally take place in 2024. According to IntoTheBlock, an AI-powered crypto data platform, USDT and USDC now account for “nearly 50% of the total transaction volume among major crypto assets.” Triple-A, on the other hand, reports that 80% of its transactions involve stablecoins.

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