Stablecoins, which are cryptocurrencies tied to stable assets such as the USD, are gaining attention from major payment companies. Recent reports suggest that the transaction volumes of stablecoins have exceeded those of Visa in the past year.

Despite these claims, industry experts remain cautious about the accuracy of these figures. This article delves into the reasons behind their skepticism.

There has been a recent statement by Chamath Palihapitiya, CEO of Social Capital, proclaiming that the weekly transaction volume of stablecoins has surpassed that of Visa, surpassing $400 billion. He mentioned that companies like Visa, Mastercard, and Stripe are embracing this trend.

Data shows that in Q4 of 2024, the average weekly transaction volume of stablecoins peaked at $464 billion, significantly higher than Visa's $319 billion. A report by Bitwise estimates that in 2024, stablecoins processed around $13.5 trillion in total transaction volume, marking the first time stablecoin volume has exceeded Visa's total annual volume.

While this milestone may suggest a significant shift in global payment systems, not everyone is as optimistic. Some experts caution against assuming that reported stablecoin volumes accurately reflect genuine economic activity, suggesting that direct comparisons with traditional systems like Visa may not be appropriate.

For instance, Joe from Maven 11 Capital highlighted how professional traders can manipulate large volumes with relatively small amounts of initial capital using platforms like Solana, with its low transaction fees. This ability to generate substantial volume with minimal investment raises concerns about the reliability of the reported figures.

Dan Smith from Blockworks Research supported Joe's stance, explaining how flash loans in decentralized finance (DeFi) can further inflate volumes at minimal costs. Rajiv from Framework Ventures dismissed stablecoin volume as a "useless metric," echoing concerns that high volumes may signal exploitative practices within the system.

The skepticism surrounding stablecoin volumes also stems from practices like wash trading and bot trading, which artificially inflate transaction volumes without adding real economic value. Wash trading involves repetitive buying and selling between controlled wallets, while bot trading uses automated programs for trades, often for arbitrage or false liquidity.

Overall, the doubts raised by experts highlight the need for caution when interpreting stablecoin transaction volumes and emphasize the complexities of comparing them to traditional payment systems like Visa.