Stablecoins as a Killer App Breakthrough

The recently published State of Crypto Report 2024 by a16z crypto shows how stablecoins have emerged as a transformative force in the financial sector.

Here are 6 key takeaways that highlight the growing impact of stablecoins in reshaping financial transactions, particularly in cross-border payments.

1. Stablecoins as a “Killer App” Breakthrough: Stablecoins have emerged as one of crypto’s most significant, successful applications, enabling fast, global, low-cost payments​.
   
   
2. Dramatic Cost Reductions: Crypto transaction costs, especially for stablecoins like USDC, have dropped by over 99% due to major infrastructure upgrades. On Ethereum, sending USDC now averages $1, compared to $12 in 2021. On Coinbase’s Base network, it's even lower, at less than $0.01.
   
   
3. Cheaper than Traditional Finance: Stablecoins are far cheaper than traditional methods like international wire transfers, which cost an average of $44.​
   
   
4. Massive Transaction Volumes: Stablecoins handled $8.5 trillion in transactions during Q2 2024—more than double Visa’s $3.9 trillion in the same period​.
   
   
5. Mainstream Adoption: Stablecoins are now competing with established financial systems like Visa, PayPal, and ACH, highlighting their growing utility and significance in global payments​.
   
   
6. Stablecoins in Daily Crypto Use: Representing 32% of daily crypto usage, stablecoins are second only to decentralized finance (DeFi) at 34%, showing their broad application beyond trading​.

For cross-border payment companies and startups, stablecoins offer a compelling path forward, enabling businesses to reduce fees and increase speed without compromising security. As crypto infrastructure continues to evolve, stablecoins are poised to play an even more significant role in reshaping global financial systems.

Check out the State of Crypto Report 2024 for a more in-depth read!