Stablecoin Payments Surge After New US Regulations

Since the implementation of the Genius Act in July, which introduced federal regulations for stablecoins, the use of these digital assets for payments has experienced a remarkable surge.

According to a report by Artemis, a blockchain data provider, stablecoin payment volumes have jumped significantly. In August, over $10 billion worth of stablecoins were used for transactions involving goods, services, and transfers. This represents a substantial increase from $6 billion in February and more than double the volume observed in August of the previous year.

Key Growth Drivers

• Business-to-Business (B2B) Payments: The primary driver of this growth has been B2B transactions, accounting for $6.4 billion monthly, nearly two-thirds of the total volume. This figure reflects a 113% increase since February.
• Overcoming Traditional Banking Delays: Businesses are increasingly leveraging stablecoins to bypass the inefficiencies and delays associated with traditional international banking systems.
• Regulatory Clarity: The passage of the Genius Act, which establishes clear guidelines for stablecoin issuers, has likely instilled greater confidence in these digital assets.

Impact of the Genius Act

The Genius Act mandates that stablecoin issuers back their tokens with highly liquid assets, such as Treasury bills. This requirement aims to enhance the stability and trustworthiness of stablecoins, making them more attractive for payments.

Andrew Van Aken, a data scientist at Artemis, noted that the growth rate of stablecoin supply has increased noticeably since the Genius Act was passed. This suggests that the new regulations are having a positive impact on the adoption of stablecoins.

Future Prospects

While stablecoin payments still represent a small fraction of overall payment volumes, their rapid growth indicates significant potential. Banks are also exploring stablecoins. Zelle, is planning on using stablecoins to enable cross-border money movement.

Van Aken suggests that the ability of stablecoin users to earn yield and facilitate faster capital transfers provides an added advantage that could drive further adoption. As trust in stablecoins grows, their use as a payment method is likely to increase.

Key Takeaways

• Stablecoin payment volumes have surged since the implementation of the Genius Act.
• B2B transactions are the primary driver of this growth.
• The Genius Act has instilled greater confidence in stablecoins.
• Faster transactions are appealing to business using stablecoins.