Tether, the world’s largest stablecoin in terms of market cap, has seen its settlement volume flip that of both Visa and Mastercard in 2022.
According to data from Coin Metrics, the stablecoin’s daily settlement volume has surpassed that of the two major credit card companies, with Tether averaging around $22 billion in daily settlements, compared to Visa’s $15 billion and Mastercard’s $11 billion.
The growth in Tether’s settlement volume can be attributed to its growing popularity as a means of payment in the cryptocurrency ecosystem.
Popular cryptocurrency exchanges, such as Binance and Bitfinex, use Tether as a base currency, allowing traders to trade in a stable currency while avoiding the volatility of other cryptocurrencies.
Additionally, Tether’s increasing use as a means of payment for goods and services has also contributed to its growing settlement volume.
The growth of the stablecoin’s settlement volume is a clear indication of the growing mainstream adoption of cryptocurrencies. It also highlights the potential for cryptocurrencies to disrupt traditional payment systems, as more and more people turn to digital assets to store and transfer value.
Despite the growing adoption, Tether has lost market share to rivals such as USDC and BUSD.
It is worth noting that Tether, which is pegged to USD, has been surrounded by controversies, particularly regarding its backing and transparency.
Centralized crypto exchanges like Coinbase urged users to move to USDC from USDT. Also, Crypto.com recently delisted USDT for Canadian users, citing regulatory concerns. However, Tether still remains one of the most widely used stablecoins in the market.
With the increasing adoption of cryptocurrencies, it will be interesting to see how Tether and other stablecoins continue to shape the future of payments.
