Apr 12, 2024 - 21:05
By cryptonews.com

Payment Use Cases Fuel Increasing Stablecoin Growth

The global stablecoin supply currently stands at over $150 billion , demonstrating new demand for relatively stable digital assets.

The stablecoin market has also grown more competitive. For example, XRP issuer Ripple recently announced plans to launch a United States dollar-backed stablecoin .

Launching a stablecoin is a natural step for Ripple as we bridge the gap between traditional finance and crypto. We have 1/ the years of experience 2/ regulatory footprint 3/ a strong balance sheet and 4/ a network with near global payout coverage, to offer the best of… https://t.co/GlyqhYl9ES

— Brad Garlinghouse (@bgarlinghouse) April 4, 2024

Ripple’s stablecoin will likely compete with the two most dominant stablecoin issuers, Tether (USDT) and Circle (USDC). The supply of Tether’s USDT and Circle’s USDC expanded by nearly $10 billion combined over the past month.

Interestingly, increasing demand for stablecoins coincides with the current crypto bull market.

Yet while stablecoin growth may be correlated with increasing cryptocurrency prices, industry experts believe demand for digital assets pegged to the U.S. dollar are surging for other reasons.

Austin Campbell, Adjunct Professor at Columbia Business School, told Cryptonews that while there is a correlation between stablecoins and the wider crypto market cap, it has been declining over time.

“It appears that stablecoins are being used independently of crypto trading for payments,” said Campbell.

He added that dollar-backed stablecoins are addressing a broader market segment compared to digital assets solely used for speculation.

Their utility may be increasing as well, as a number of stablecoin payment use cases are coming to fruition.

For ex ample, David Uhryniak, Head of TRON Ecosystem Development, told Cryptonews that an app called Grab – known as the “Uber of Singapore” – recently began accepting USDT on TRON for payments.

“TRC20-USDT holders can now pay for their rides or food delivery directly without converting to fiat currency,” said Uhryniak. “I expect a growing trend where more international e-commerce platforms will integrate with TRON to accept crypto transactions for everyday services.”