3 Reasons Why Stablecoins Will Beat Payment Giant Visa This Quarter

LUCKNOW (CoinChapter.com) — Could stablecoins unseat payment processing giant Visa in terms of total payment volume processed this quarter? According to crypto research firm Sacra, that scenario is increasingly likely.

In a blog post, Sacra co-founder Jan-Erik Asplund argued that stablecoins’ “extreme product-market fit for cross-border money movement” will see their total payment volume exceed Visa’s, reaching over $4 trillion this quarter alone.

Stablecoins are estimated to pass Visa in total payments volume in Q2.

Anyone know where most of these volumes are coming from? And what they're being used for? pic.twitter.com/LEZbpnZGLO

— Turner Novak (@TurnerNovak) May 5, 2024

Transaction Speed And Less Cost Might Be One Of The Reasons…..

According to Asplund, the key advantages driving stablecoin growth is convenience, speed, and cost savings compared to traditional payment rails like Visa.

Stablecoins win on convenience, enabling cross-border payments to be completed any day of the week (rather than business days only), on speed (in minutes rather than 6 to 9 hours), and cost ($0.0037 vs. $12).

He wrote.

Despite the bold prediction, Visa’s head of crypto Cuy Sheffield pushed back. He claimed much of the stablecoin transaction volume is inflated by bot activity and automated programs that “don’t resemble settlement in the traditional sense.”

Visa’s new stablecoin dashboard estimates just 10% ($149 billion) of April’s $2.2 trillion in total stablecoin transaction volume came from genuine users and economic transactions.

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Integration with Major Financial Platforms Could Be Another Reason…

Major financial institutions and payment platforms are increasingly integrating stablecoins into their operations. For example, Visa itself has been actively expanding its stablecoin settlement capabilities. In 2021, Visa initiated a pilot program using USD Coin (USDC) to settle transactions over the Ethereum blockchain. 

Building on this, Visa has further broadened its stablecoin settlement capabilities. The company now supports the Solana blockchain to enhance the speed and efficiency of cross-border settlements with stablecoins. 

Additionally, Visa has collaborated with merchant acquirers such as Worldpay and Nuvei, allowing these platforms to receive settlements in USDC. 

The Stablecoin Volume Explosion In 2024

Regardless of the data accuracy concerns, stablecoin payment volumes have clearly exploded in 2024. Tether (USDT) and USD Coin (USDC) continue dominating the market.

According to Visa’s dashboard, total monthly stablecoin volume has nearly doubled since January 2024 despite filtering out suspected bot activity.

Stablecoins are also rapidly gaining mainstream traction beyond just crypto. Payment giants like PayPal (launched PYUSD in 2023), Stripe, and Ripple are all racing to launch or support stablecoin payments.

With over $160 billion in market cap, $49 billion in daily trading volume, and major payment players embracing them, stablecoins could realistically challenge Visa’s incumbent status in 2024.

Signs point to stablecoins Overthrow Visa

While concerns over transparency remain, the data indicates stablecoins are revolutionizing the global payments system – and doing so at warp speed.

Their key advantages of 24/7 availability, low fees, and near-instant settlement could propel stablecoins past Visa’s quarterly payment volumes for the first time ever in Q2 2024. 

Even if they fall short, the broader trend toward stablecoin dominance appears inevitable based on the enthusiastic mainstream embrace of crypto’s “killers apps” for payments.

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