The Ethereum blockchain has processed nearly US$6 trillion in stablecoin volume this quarter, a volume surge that is reflective of real economic activity as traditional financial markets are rapidly moving onto the blockchain. In the last day, stablecoin volume has surged past $85 billion. For comparison, Visa processes about US$8 trillion in transactions a year – a figure that Ethereum stablecoins may hit this quarter. It is clear that blockchain is reshaping finance and is steadily gaining significant market share from traditional payment rails.
As the CEO of the company that issues the USDC stablecoin stated:
“We are at the fulcrum of a massive mainstream embrace of stablecoins in the financial system, and firms are racing to build on this infrastructure…But until now, the blockchain infrastructure needed to meet the most intense demands of major financial firms and enterprises has simply not existed.”
Reserves larger than many nation-states
Moreover, the Ethereum blockchain ecosystem now holds some US$165 billion in stabecloin reserves, positioning itself among the world’s highest. This exceeds some national reserve pools of major nation-states – including Singapore and India.
Traditional payment giants playing catch-up
Are traditional payment giants like Visa, Mastercard, SWIFT and Western Union paying attention? They certainly are – and rightfully so. All four of these giants are currently undergoing massive reforms to move onto the blockchain. As we reported yesterday on Western Union, after announcing the launch of a dollar-backed stablecoin to allow its 100 million customers to send money internationally detached from local currency fluctuations and risks, the firm is now set to roll out a “stable card” for high-inflation economies. Interestingly, Western Union has chosen a blockchain rival of Ethereum, Solana, for its payment rails.
A game changer?
Meanwhile, Mastercard has teamed up with Ripple Labs to test settling fiat credit card transactions over the XRP Ledger blockchain using the blockchain’s native stablecoin, RLUSD, while Visa is using four unique blockchains – including Ethereum and Solana – for payment settlements. Some analysts are saying that Visa’s exploration of digital assets for cross-border payments “could be a game changer”.
But, as data tells us on Ethereum, the game has already changed.