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Stablecoin turnover has doubled in the past two years as AI payments and traditional finance use cases grow, though Standard Chartered still sees the market reaching $2 trillion.Standard Chartered analysts say rising stablecoin velocity could reduce the need for new token supply even as transaction volumes climb.
Stablecoin velocity has doubled over the past two years amid new payment use cases and rising traditional finance activity, Standard Chartered said in a Tuesday report seen by Cointelegraph. Velocity refers to how often stablecoins are used relative to the amount outstanding, meaning faster turnover can support more transaction volume without requiring the supply to grow at the same pace. “If velocity remains constant, rising transactions will create demand for more stablecoins, but if it increases, that will not be the case,” Standard Chartered’s head of crypto research, Geoff Kendrick, said.The finding marks a change from Standard Chartered’s earlier assumption that stablecoin velocity would stay broadly stable as the market expanded. “If velocity increases, however, that would be assumed to reduce the need for the total number of stablecoins required,” Kendrick said.The analyst said the spike in velocity “so far appears” to reflect a gradual shift in stablecoin use toward new use cases, specifically higher-velocity TradFi replacement and AI-related transactions. Kendrick said there has been no increase in velocity in pre-existing use cases such as emerging market savings.The sharp surge in stablecoin velocity, reaching turnover of at least six times a month on average, has been driven mainly by Circle’s USDC (USDC’s velocity began rising in mid-2024 across all chains, particularly on Solana and Base, highlighting a shift toward TradFi use as well as early Monthly adjusted transaction volumes divided by average supply outstanding. Source: Standard Chartered In contrast, USDT velocity remained relatively low, reflecting its stronger position in the lower-velocity emerging market savings use case, Kendrick said. “In other words, the two market leaders appear to have different strengths by use case — EM savings for USDT and TradFi replacement for USDC,” he added.Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy
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