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Cryptocurrencies, including stablecoins, still only pay for 0.2% of online commerce transactions globally, according to the report.
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Stablecoins are gaining traction, but they still only pay for a small fraction of global online commerce transactions — and stablecoins pegged to currencies besides the United States Dollar (USD) are too scarce, according to a report published Nov. 27.
Cryptocurrencies, including stablecoins, “account for just 0.2% of global e-commerce transaction value, according to the report, which was created by strategy consultancy Quinlan & Associates and blockchain developer IDA.
“Paired with blockchain-enabled favourable features such as programmability, stablecoins can offer cost efficiency, enhanced transparency, 24/7 availability, and faster processing that traditional financial systems simply can’t match,” Lawrence Chu, IDA’s CEO and co-founder, said in a statement.
Despite this potential, stablecoin “usage remains largely within the Web3 ecosystem,” the report said, citing regulatory uncertainly and limited non-USD stablecoin options as signficant barriers.
Source: Quinlan & Associates, IDA
Related: Stablecoins boosting demand for US T-bills: Treasury Dept
“This reluctance is largely driven by regulatory uncertainty, with 81% of merchants citing it as the primary barrier to accepting digital assets like stablecoin as a mainstream payment option,” Benjamin Quinlan, Quinlan’s CEO, said in a statement.
Additionally, “with 83% of countries worldwide not using the USD as their official or secondary currency and ~40% of international payments being conducted in non-USD currencies, there is a pressing need for non-USD pegged stablecoins,” the report said.
Stablecoins collectively represent $200 billion in total market capitalization, virtually all of which comprises stablecoins pegged to USD, according to data from CoinMarketCap.
Tether (USDT) and USD Coin (USDC) are the most popular stablecoins, with market caps of around $130 billion and $40 billion, respectively, the data shows.
IDA plans to launch a stablecoin pegged to the Hong Kong Dollar (HKD) to support “payments between Hong Kong and global markets,” Quinlan and IDA said.
Source: CoinMarketCap
Stablecoins seem to be increasing demand for short-term US government bonds known as Treasury bills, according to the US Department of the Treasury.
“[B]ecause most stablecoin collateral reportedly consists of either Treasury bills or Treasury-backed repurchase agreement transactions, the growth in stablecoins has likely resulted in a modest increase in demand for short-dated Treasury securities,” according to Treasury Department meeting minutes released on Oct. 29.
On Nov. 20, former US Senator Pat Toomey told Cointelegraph that lawmakers will likely advance stablecoin regulations starting in 2025.
Toomey believes there are several unanswered questions regarding stablecoin issuers that must be resolved first, including reserve requirements, insurance on bank deposits, and regulatory jurisdiction.
Several pieces of key crypto legislation will be considered in the upcoming congressional term, including Senator Bill Hagerty’s Clarity for Payment Stablecoins Act.
Magazine: How to upset Cardano’s Charles Hoskinson by quoting him accurately
This article first appeared at Cointelegraph.com News
