Rising Stablecoin Velocity Alters Market Dynamics

A growing trend in the cryptocurrency market is transforming the way stablecoins are used and perceived. Standard Chartered's analysis reveals a pivotal development in stablecoin economics: rising transaction velocity may substantially curb demand for new issuance.

The study found that the velocity of stablecoin usage has increased substantially, meaning the existing supply now facilitates more economic activity than previously anticipated. This trend is primarily driven by USDC's expanding utility on efficient networks like Solana and Base.

USDC's increasing turnover can be attributed to its growing use in traditional finance alternatives, AI payments, and DeFi ecosystems. In contrast, Tether's USDT maintains a relatively low and stable turnover rate due to its entrenched position as a savings instrument in emerging markets.