Other than Bitcoin, which achieved remarkable milestones in 2024, stablecoins emerged as the most dynamic asset class of the year. A 2024 report by a16z even described them as ‘crypto’s killer app,’ cementing their status as a cornerstone of the digital economy.
[TECH] REPORT | Stablecoins Have Become Crypto’s Killer App Amid Blockchain Scaling Improvements, Says New a16z Report: By enabling fast, cheap, global payments, among other uses, stablecoins have become o.. https://t.co/owxKcyPy4O via @BitcoinKE
— Top Kenyan Blogs (@Blogs_Kenya) November 18, 2024
From exponential transaction growth to transformative adoption in underbanked regions, stablecoins have proven their value as indispensable tools for payments, savings, and cross-border transactions.
In this piece, we highlight the top five major stablecoin milestones we covered between January and December 2024, offering a closer look at their rising influence and potential to reshape the financial landscape.
1.) Stablecoin Transfer Costs Fell by Over 90%
According to an a16z report, on Ethereum, transactions involving USDC, a popular U.S. dollar-pegged stablecoin, cost on average $1 in gas fees this month, down from $12 on average in 2021.
Sending USDC on Base, Coinbase’s popular L2 network, costs less than a cent on average.
On the flipside, it costs $44 on average to send an international wire transfer.
According to the report, stablecoins amounted to $8.5 trillion in transaction volume across 1.1 billion transactions in the second quarter of 2024 ended June 30.
“Stablecoin transaction volumes more than doubled VISA’s $3.9 trillion in transactions over the same period. That stablecoins have entered the same conversation as such well-known and entrenched payment services as VISA, PayPal, ACH, and Fedwire is a remarkable testament to their utility.”
– a16z crypto
2.) Stablecoins Account for 32% of Daily Crypto Usage
Based on the data, stablecoins represent nearly a third of daily crypto usage at 32%, second only to decentralized finance, or DeFi, at 34%, as measured by share of daily active addresses.
The rest of crypto’s usage is spread across infrastructure (bridges, oracles, maximum extractable value, account abstraction, etc.), token transfers, and a smattering of other areas, including emerging applications such as gaming, NFTs, and social networking.
The key reason is the scaling improvements witnessed in blockchains. Blockchains are processing more than 50 times as many transactions per second as they were just four years ago thanks to the rise of Ethereum L2 networks and other high-throughput blockchains.
3.) Stablecoins Have Become Digital Dollar
In emerging markets, stablecoins are increasingly being used for reasons other than facilitating crypto trades.
REPORT | ‘There is Growing Stablecoin Usage for Non-Crypto Activities in Emerging Markets,’ Says VISA
According to one survey of 2,500 active stablecoin users in India, Indonesia, Nigeria, Turkey, and Brazil, 47% of participants said they primarily use stablecoins to get… pic.twitter.com/6WfZHfJPQa
— BitKE (@BitcoinKE) September 19, 2024
According to the survey, of 2,500 active stablecoin users in India, Indonesia, Nigeria, Turkey, and Brazil:
- 47% of participants said they primarily use stablecoins to get dollar-access
- 43% said to get better currency conversion rates, and
- 32% said to send money internationally
This was reiterated by Tether CEO, Paulo Ardoino:
“In the last few years we have seen the usage of USDT going from pure cryptocurrency trading to being basically the most used digital dollar in the world,” Ardoino said to Reuters on the sidelines of the 2024 Token2049 crypto conference in Dubai.
“Almost the entire user base is (in) emerging markets,” he said, mentioning Turkey, Vietnam, Brazil, Argentina and ‘African countries,’ where dollars can sometimes be in short supply.
4.) Stablecoins Account for 43% of Crypto Transactions in Sub-Saharan Africa
Generally, stablecoins now account for approximately 43% of the total cryptocurrency transaction volume in sub-Saharan Africa, according to the latest 2024 Geography of Cryptocurrency Report by Chainalysis.
🇪🇬 🇩🇿🇲🇦NORTH AFRICA | Out of The Top 10 Largest Crypto Markets in the #MENA region, 3 Are African
Centralized exchanges remain the primary source of crypto inflows across MENA overall, indicating that most users and institutions still prefer traditional crypto platforms.… pic.twitter.com/Jdhn56KNd6
— BitKE (@BitcoinKE) October 7, 2024
Ethiopia has become the continent’s fastest-growing market for retail-sized stablecoin transfers, experiencing a 180% year-over-year (YoY) growth.
🇪🇹REPORT | Stablecoin Transfers Account for 43% of All Crypto Transfers Across Africa, #Ethiopia is Fastest-Growing Market, Says Chainalysis
According to Chainalysis, Ethiopia has become the continent’s fastest-growing market for retail-sized stablecoin transfers, experiencing a… pic.twitter.com/pJMLHAp09T
— BitKE (@BitcoinKE) October 4, 2024
Similar to Ethiopia, Ghana, and South Africa, stablecoins are also a major part of Nigeria’s crypto economy, accounting for approximately 40% of all stablecoin inflows in the region – by far the highest in all of Sub-Saharan Africa.
5.) Stablecoins Account for Majority Of Illicit Transactions
REPORT | Stablecoins Now Account for the Majority of Illicit Transactions in Crypto, Says Chainalysis
In its recent crypto crime report, blockchain analytics firm, Chainalysis, underscores that between 2018 and 2021, Bitcoin held the position as the favored ‘cryptocurrency of… pic.twitter.com/s4XSEDANHO
— BitKE (@BitcoinKE) January 20, 2024
Between 2018 and 2021, Bitcoin was the dominant ‘cryptocurrency of choice’ for criminals. However, this trend began to change in 2022 and 2023, with stablecoins overtaking Bitcoin in illicit transaction volume.
While this underscores the growing adoption and utility of stablecoins, it also highlights the critical need for stronger regulatory frameworks and enforcement measures to address the evolving misuse of this powerful financial tool.
As we reflect on the major milestones of 2024, this development serves as a reminder that alongside the opportunities presented by stablecoins, there are challenges that demand attention to ensure their benefits are realized responsibly.
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