Tuesday, February 27, 2024

Annual Stablecoin Transaction Volume Crossed $5 trillion in 2021.

As stablecoin usage achieved new heights in 2021, it has found product-market fit and broader institutional acceptance. The annual stablecoin adjusted transaction volume crossed $5 trillion. This is over 370% year-on-year growth compared to 2020.

This also attracted the scrutiny of lawmakers and the call for regulation. The Office of the Comptroller of the Currency has approval to the banks in the US to stablecoins for payment activities. Its mainly used for lending, borrowing purposes of other digital assets. This enabled banks to validate stablecoin transactions via blockchain networks. It provided clarity to the financial institutions that stablecoins are efficient as means of transaction settlements.

The President’s Working Group on Financial Markets acknowledged the investor risks surrounding stablecoins. It said market integrity and investor protection risks market manipulation, possible fraud, and lack of price transparency. Stablecoins allow users to move easily between digital asset platforms. It reduces the need for traditional currencies. But the rapid growth and adoption of stablecoins prompted the lawmakers and regulators to increase works on the protection of investors. Analysts said failure to establish a safeguard would drastically affect the growth of payment stablecoins.

The majority of stablecoins, currently in circulation, are powered by public blockchain networks. These networks are highly regarded for features are transparency and greater computational properties. It also provides open and direct access to the distributed ledger.

The market capitalization of stablecoins, as of October 2021, exceeded $127 billion. This reflects a 500% increase over year-on-year. Jeremy Allaire, Circle’s CEO, predicts 2022 as another milestone year for stablecoins. He believes more companies and investors across the world will take up stablecoins

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.

Most Popular