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Bots Dominate 90% of Stablecoin Transactions, Visa Reveals
Visa Inc., a prominent transnational payments company, recently revealed that more than 90% of stablecoin transactions are not linked to real users.
Stablecoin transactions on the rise
A metric developed by Visa in collaboration with Allium Labs showed that most of these transactions originate from bots and large traders rather than genuine users.
This finding challenges the claims made by stablecoin proponents who believe these dollar-pegged tokens will revolutionize the payments industry. Despite this, major fintech players like PayPal Inc. and Stripe Inc. are still exploring the potential of stablecoins.
Pranav Sood, an executive at Airwallex, a payment platform, said:
“This shows that stablecoins are still in their infancy as a payment instrument. It doesn’t mean they don’t have long-term potential, because I think they do. But in the short to medium term, we need to focus on making sure that the existing mechanisms work much better.”
The new problem
The issue of double-counting, where the same transaction is counted multiple times across different platforms, has long plagued the cryptocurrency space. This makes it difficult to accurately assess the true value of cryptocurrency activity.
Visa’s head of cryptocurrency, Cuy Sheffield, illustrated how double-counting occurs with stablecoins. If a user converts stablecoins from one platform to another on a decentralized exchange, the total value of the stablecoins involved is counted twice.
This revelation comes amidst the growing popularity of the “dead internet theory,” which posits that a significant portion of online content is generated automatically, and that human users are becoming outnumbered by bot accounts.
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