Visa Solana - The Relentless Rise of Stablecoins

The
Relentless Rise
of Stablecoins
An onchain analysis
of USD-backed
stablecoin activity
By Peter Johnson and

Sai Nimmagadda
“I Need a Dollar, Dollar, a [Crypto] Dollar is What I Need”
The opening line of “I Need a Dollar” by Aloe Blacc concisely describes the world’s insatiable demand for US dollars 1. This demand is
demonstrated by numerous factors, including dollars dominating global trade 2, over $1tn in physical dollars (representing around half of
all physical dollars, and over 2/3rd of $100 bills) being held outside the US 3, and non-US banks/lenders providing over $12tn in dollar-
denominated credit via bank loans and bonds 4.
One of our core theses is that global audiences will increasingly access dollars via stablecoins (also known as cryptodollars 5). This is a
thesis that individual members of our team have been actively writing, speaking, and investing behind for over five years. During this
time, the value of stablecoins outstanding has grown from less than $3bn to over $120bn today 6. Most recently, in a move that both
highlights the opportunity in stablecoins and could upend global financial services, PayPal, a payments company with a $70bn market
cap and over 400mm active users, launched its stablecoin, PYUSD.
To better understand the explosive growth of stablecoins, we conducted an extensive study of onchain stablecoin activity.
Results of this study are presented across seventy graphs and multiple matrices, along with detailed commentary.
In this study, we focused on US dollar fiat-backed stablecoins, which are stablecoins backed by bank deposits, US treasuries, cash
equivalents, or other similar high-quality liquid assets. Specifically, we included the largest fiat-backed stablecoins - USDT, USDC,
BUSD, and TUSD. We focused on fiat-based stablecoins because we are most interested in non-speculative stablecoin usage. We
have found that the vast majority of non-speculative activity uses fiat-backed stablecoins. Onchain activity for these stablecoins was
analyzed across the following blockchains and L2s 7: Ethereum, Tron, Binance Smart Chain, Polygon, Optimism, Arbitrum, Fantom, and
Avalanche. These blockchains cover the vast majority of stablecoin economic activity. In this report, all references to aggregate
stablecoin statistics refer to just the above-referenced fiat-backed stablecoins issued on these blockchains and do not include non-fiat-
backed stablecoins such as DAI. Solana blockchain data was not included due to the challenges of indexing, storing, and computing
the sheer volume of this data. In future research, we hope to include the Solana blockchain, which represents around 2% of fiat-backed
stablecoin supply.
This report is structured to start with the ten most significant takeaways from our research, then provide additional details
regarding A) weekly active addresses, B) transaction volumes ($ value), C) number of transactions, D) outstanding supply, E)
holdings by entity type, and F) holdings by value of holdings. Across each of these areas of research, we present both the overall
trends as well as breakdowns between the different stablecoins and different blockchains utilized.
1
All references to dollars are US dollars, unless otherwise noted.
2
Over the period 1999-2019, the dollar accounted for 96% of trade invoicing in the Americas, 74%in the Asia-Pacific region, and 79% in the rest of the world. The only
exception is Europe, where the euro is dominant with 66%. Source: https://www.federalreserve.gov/econres/notes/feds-notes/the-international-role-of-the-us-dollar-post-covid-
edition-20230623.html
3
Source: https://www.stlouisfed.org/on-the-economy/2022/oct/innocent-greenbacks-abroad-us-currency-held-internationally
4
Source: http://www.imf.org/~/media/Files/Publications/GFSR/2018/April/ch1/doc/text.ashx?la=en
5
We prefer the term cryptodollars, which was coined by Castle Island Ventures, although use the term stablecoins in the rest of this paper for consistency with current industry
norms.
6
Statistics as of June 30, 2023, unless otherwise noted.
7
We also included Tron on Omni (Bitcoin blockchain) for historical stablecoins supply numbers but did not include it for other metrics because it no longer represents a
significant amount of activity.
The commentary contained in this document represents the personal views of its authors and does not constitute the formal view of Brevan Howard. The views expressed in the
document are not intended to be and should not be viewed as investment advice. Please refer to the section entitled “Important Legal Information & Disclaimer” set out at the end of
this document. © Brevan Howard Capital Management LP (2023). ADV017242
2
Contents
10 Key Takeaways .................................................................................................................................................................................... 4
Weekly Active Addresses ........................................................................................................................................................................ 5
Weekly Active Addresses – By Stablecoin ............................................................................................................................................. 6
Weekly Active Addresses – By Blockchain ............................................................................................................................................ 8
Weekly Active Addresses – Blockchain / Coin Matrix ............................................................................................................................ 9
Weekly Active Addresses – By Volume Sent ....................................................................................................................................... 10
Transaction $ Volume ............................................................................................................................................................................ 11
Transaction $ Volume – By Stablecoin................................................................................................................................................. 15
Transaction $ Volume – By Blockchain ................................................................................................................................................ 16
Transaction $ Volume – Blockchain / Coin Matrix ................................................................................................................................ 18
Transactions (#) ...................................................................................................................................................................................... 19
Transactions #’s & Volumes – Stablecoins vs. PayPal, Visa, ACH, and Fedwire ................................................................................ 20
Transactions (#) – By Stablecoin ......................................................................................................................................................... 20
Transactions (#) – By Blockchain ......................................................................................................................................................... 21
Transactions (#) – Blockchain / Coin Matrix ......................................................................................................................................... 22
Outstanding Supply ............................................................................................................................................................................... 22
Outstanding Supply – By Stablecoin .................................................................................................................................................... 25
Outstanding Supply – By Blockchain ................................................................................................................................................... 26
Outstanding Supply – Blockchain / Coin Matrix.................................................................................................................................... 28
Summary Blockchain / Coin Matrix ...................................................................................................................................................... 28
Holdings By Entity Type ........................................................................................................................................................................ 29
Holdings by Entities – By Stablecoin .................................................................................................................................................... 32
Holdings by Entities – By Blockchain ................................................................................................................................................... 32
Holdings By Balance .............................................................................................................................................................................. 33
Holdings by Balances – Further Analysis ............................................................................................................................................. 34
Conclusion .............................................................................................................................................................................................. 36
Methodology ........................................................................................................................................................................................... 37
Important Legal Information & Disclaimer ........................................................................................................................................... 38
3
10 Key Takeaways
1. In 2022, stablecoins settled over $11tn onchain, dwarfing the volumes processed by PayPal ($1.4tn 8), almost
surpassing the payment volume of Visa ($11.6tn 9), and reaching 14% of the volume settled by ACH 10, and over 1% the
volume settled by Fedwire 11. It is remarkable that in just a few years, a new global money movement rail can be compared
with some of the world's largest and most important payment systems.
2. Over 25mm blockchain addresses hold over $1 in stablecoins. Of these, ~80%, or close to 20mm addresses, hold
between $1 and $100. For a sense of scale, a US bank with 25mm accounts would rank as the 5th largest bank in the
US by number of accounts 12. The massive number of small-dollar stablecoin holdings also indicates the potential for
stablecoins to provide global financial services to customers underserved by traditional financial institutions.
3. Approximately 5mm blockchain addresses send stablecoins each week. This number provides a rough proxy for
global users regularly interacting with stablecoins 13. These ~5mm weekly active addresses send ~35mm stablecoin
transactions each week, representing an average of ~7 weekly transactions per active address.
4. Stablecoin usage has shown a low correlation with crypto exchange volumes, indicating that significant stablecoin
transaction volumes are likely driven by non-trading/speculative activity. Since December 2021, centralized exchange
volumes are down 64%, and decentralized exchange volumes are down 60%. During this period, stablecoin volumes are down
only 11%, and weekly active stablecoin addresses and weekly stablecoin transactions are up over 25%.
5. Of the ~5mm weekly active stablecoin addresses, ~75% transact less than $1k per week, indicating that small/retail users
likely represent the majority of stablecoin users.
6. The outstanding supply of stablecoins has grown from less than $3bn five years ago to over $120bn today (after
peaking at over $160bn) and has shown resilience to the market downturn with the market cap of stablecoins being currently
being down ~24% from its peak, compared with a ~57% decline for the overall crypto market cap.
7. Less than 1/3rd of stablecoins are held on exchanges 14. Most are held in externally owned accounts (i.e., non-exchange
wallets). This further indicates that a significant proportion of stablecoin holdings are likely used for non-speculative purposes.
8. The majority of stablecoin activity uses Tether (USDT). Year-to-date, Tether has accounted for 80% of weekly active
addresses, 75% of transactions, and 55% of volumes.
9. More stablecoin activity occurs on Tron than on any other blockchain. Year-to-date, transactions on the Tron blockchain
account for 49% of weekly active addresses, 37% of transactions, and 35% of volumes.
10. There are strong signs of continued USDC adoption across almost all metrics, including active addresses, transaction
counts, and transaction volumes (despite the recent contraction of USDC outstanding from ~$56bn to ~$29bn).
8
Source: https://www.businessofapps.com/data/paypal-statistics/
9
Source: https://annualreport.visa.com/financials/default.aspx. Visa metrics are for 2022 fiscal year, which ended Sept. 30, 2022.
10
Source: https://www.nacha.org/news/ach-network-moves-30-billion-payments-77-trillion-2022-led-growth-same-day-ach-and-b2b#
11
Source : https://www.frbservices.org/resources/financial-services/wires/volume-value-stats/annual-stats.html/
12
Source: https://www.magnifymoney.com/news/largest-banks-in-the-us/
13
This is an imperfect measure of the number of stablecoin users because it does not include off-blockchain transactions (e.g., transfers between users on an exchange), and
because users can have multiple addresses.
14
Based on addresses identified to be exchange wallets.
4
Weekly Active Addresses
The number of weekly active addresses sending stablecoins onchain represents a rough proxy for the number of global stablecoin
users. As mentioned above, this is an imperfect measure of the number of stablecoin users because it does not include off-blockchain
transactions (e.g., transfers between users on an exchange) and because users can have multiple addresses.
This metric has shown relentless growth since the introduction of stablecoins, including through downturns in crypto prices. YTD, the
number of weekly active addresses has grown ~35%, and there are currently ~5mm addresses sending stablecoins each week.
5
Weekly Active Addresses – By Stablecoin
The vast majority (~80%) of active addresses each week use USDT, while ~15% utilize USDC, and ~5% utilize BUSD.
Looking more closely at each stablecoin, we see that USDT and USDC have followed similar trajectories in accumulating weekly active
addresses. However, the USDC numbers are an order of magnitude less than USDT's. BUSD had reached ~1mm WAAs, which has
fallen to ~200k. TUSD weekly users are negligible.
(See detailed graphs for each stablecoin on the following page)
6
Around 4mm addresses are sending USDT each week, with ~700k for USDC, ~190k for BUSD, and ~1k for TUSD.
7
Weekly Active Addresses – By Blockchain
Switching to look at the blockchain utilized, we see that ~40% of active addresses are on the Tron blockchain, and ~32% are on BSC.
The percentage of weekly active addresses on Ethereum has dwindled with the adoption of faster, cheaper blockchains and L2s and
currently stands at just 6%. Newer blockchains and L2s such as Polygon, Arbitrum, and Avalanche have started to take a noticeable
share of volumes.
Examining the data for each blockchain individually (see graphs on next page), we see that:
- Weekly active addresses on Ethereum have been relatively flat at 300k-500k since the beginning of 2020.
- Active addresses on Tron have grown relentlessly and now are close to 3mm.
- Active addresses on BSC have remained strong at ~1.5mm.
- Growth on Polygon has accelerated over the last year and is now reaching close to 500k weekly active addresses.
- Growth has also been strong on Arbitrum (now ~250k), Avalanche (~200k), and Optimism (~100k). Fantom showed a spike in
weekly activity, which has since subsided.
8
Weekly Active Addresses – Blockchain / Coin Matrix
Using a matrix to look at average weekly active addresses for the first half of 2023 across all blockchain/stablecoin combinations, we
see that the most weekly active addresses used USDT on the Tron blockchain, followed by USDT on the BSC blockchain.
Weekly Active Addresses – 1H’23 Average
USDT USDC BUSD TUSD TOTAL
Ethereum 264,777 109,321 4,942 729 379,769
Tron 2,405,015 5,165 - 2,679 2,412,859
BSC 1,017,846 47,641 310,212 - 1,375,699
Polygon 146,861 186,194 - - 333,055
Optimism 14,234 74,610 - - 88,844
Arbitrum 80,250 137,184 - - 217,434
Fantom 2,617 31,093 - - 33,710
Avalanche 35,950 63,597 - - 99,547
TOTAL 3,967,550 654,805 315,154 3,408 4,940,917
9
Weekly Active Addresses – By Volume Sent
A breakdown of active addresses by the volume transacted each week provides further information on the nature of these addresses.
Notably, ~75% of all weekly active addresses transact less than $1k per week, indicating that small/retail users likely represent the
majority of stablecoin users. Breaking this down further:
- ~34% of active addresses (~1.5mm addresses) are transacting weekly volume between $1 and $100. This bucket of active
addresses has been steadily growing since January 2021.
- The next highest bucket of active addresses is the $100-$1k bucket, making up ~32% or 1.4mm of all active addresses.
- Addresses transacting between $1k-$10k per week have been shrinking since 2018 when compared to the rest of the buckets;
at one point, 39% of all active addresses belonged to this category, whereas now they only account for 19% of active
addresses.
- Weekly active addresses that transacted less than 1 USD weekly make up about 10% of the active addresses.
10
Transaction $ Volume
The dollar value settled by stablecoins onchain (which excludes off-chain transactions such as trading on centralized exchanges) grew
to over $11tn in 2022, dwarfing the volumes processed by PayPal ($1.4tn), almost surpassing the payment volume of Visa ($11.6tn),
reaching 14% of the volume settled by ACH, and over 1% the volume settled by Fedwire 15.
Stablecoin volumes peaked at over $1.3tn in weekly volume in early 2021 due to some unusual activity described below, and recent
months have been in the $150bn-$200bn per week range.
The significant spike in early 2021 shown above was significantly driven by pass-through transactions between smart contracts,
predominantly on the Venus protocol on Binance Smart Chain utilizing BUSD and USDT. These volumes represented a specific flurry
of onchain speculative activity at that time, and looking at transaction volume data with Binance Smart Chain removed provides a
clearer view of stablecoin volume trends.
15
References provided earlier in report.
11
Below is the data with BSC removed and a 50-week moving average line, which shows the continued forward progress in transaction
volumes.
12
Furthermore, comparing stablecoin transaction volumes to overall spot trading volumes across major centralized exchanges 16 (“CEX”s),
stablecoin volumes have shown a greater degree of resilience. CEX volumes have been down 64% since December 2021, while
onchain stablecoin volumes have only been down 11% during the same period. It is worth noting again here that all stablecoin volumes
in this report are onchain volumes and do not include stablecoin trading volumes on CEXs.
16
Source: CoinMetrics; Includes: Binance, Bitfinex, Coinbase, OKX, Gate, Kucoin, Gemini, Kraken, Bithumb, FTX, and FTX.US.
13
Similarly, when comparing stablecoin volumes with DEX trading volumes, as seen in the chart below, we can observe that stablecoin
volumes have also been much more resilient than DEX volumes, with DEX volumes down 60% since December 2021, compared with
the 11% stablecoin volume decline.
14
Transaction $ Volume – By Stablecoin
Most stablecoin value is transacted in USDT, with USDT volumes recently accounting for almost two-thirds of settlement volume.
USDC has lately been close to a third of the total volume, with BUSD and TUSD accounting for the remainder (~2% and 1%,
respectively).
On further inspection, USDT volumes have shown great resilience, averaging above $100bn in weekly volume YTD. Post-SVB, USDC
volumes have dropped 2/3rd from March to June this year (~$55bn in weekly volume as of June). BUSD volumes have dropped 57%
YTD, and TUSD transaction volumes can be described as occasional spikes and not sustainable transaction volumes.
15
Transaction $ Volume – By Blockchain
Breaking down transaction volume by blockchains, we see a steady increase in volumes on Tron, which recently topped Ethereum as
the blockchain with the greatest transaction volume.
Additional observations:
- Tron now settles about ~$70bn of weekly onchain stablecoin volume.

- Ethereum has the second highest onchain stablecoin transaction volumes, recently settling ~$66bn / week. This is significantly
down from 2021-2022 when stablecoins regularly settled $100bn per week on Ethereum. Volume on Ethereum dropped
starkly post the SVB crisis but seems to have recently been regaining momentum.
- There were periods of highly elevated volume on Binance Smart Chain and Fantom from waves of onchain yield-farming,
cross smart-contract transfers, and trading. However, weekly volumes have now fallen to ~$10bn and $140mm, respectively.
- Volumes on Arbitrum have shown recent solid momentum, reaching over $8bn in weekly volume.
16
17
Transaction $ Volume – Blockchain / Coin Matrix
Weekly Volume Sent - 1H’23 Average
Ethereum $30,224,420,033 $63,941,183,280 $4,753,494,547 $304,727,934 $99,223,825,794
Tron $66,709,346,266 $1,564,517,928 - $937,698,853 $69,211,563,047
BSC $8,422,655,961 $1,341,955,058 $2,911,315,637 - $12,675,926,656
Polygon $1,335,538,953 $2,131,923,837 - - $3,467,462,790
Optimism $345,586,721 $4,719,456,370 - - $5,065,043,091
Arbitrum $1,915,821,916 $4,048,643,291 - - $5,964,465,207
Fantom $109,208,291 $329,255,418 - - $438,463,709
Avalanche $668,283,596 $1,132,753,279 - - $1,801,036,875
TOTAL $109,730,861,737 $79,209,688,461 $7,664,810,184 $1,242,426,787 $197,847,787,169
18
Transactions (#)
The number of weekly onchain stablecoin transactions is another metric that shows relentless growth through market cycles. At the end
of June 2023, there were ~38mm weekly stablecoin transactions, following an all-time high of over 43mm transactions sent in one
week. With ~5mm addresses sending stablecoins, this equals an average of over seven transactions sent per week for active
stablecoin addresses.
19
Transactions #’s & Volumes – Stablecoins vs. PayPal, Visa, ACH, and Fedwire
Once again, comparing onchain stablecoin metrics to some of the world’s global money movement rails – we see that in 2022,
stablecoins settled ~6.5x as many transactions as Fedwire, around 4% of the number of transactions as ACH, and <1% of the number
of transactions at Visa. Below is a consolidated comparison of 2022 transaction values and volumes across these rails.
Multiple of Stablecoins
Transaction Transaction
# of Transactions Transaction #
Volume ($) Volume ($)
Stablecoins $11.1 tn 1.3 bn 1.00x 1.00x
PayPal 17 $1.4 tn 22.3 bn 0.13x 17.15x
Visa 18 $11.6 tn 192.5 bn 1.05x 148.08x
ACH 19 $76.7 tn 30.0 bn 6.91x 23.08x
Fedwire 20 $1,060.3 tn 0.2 bn 95.50x 0.15x
Transactions (#) – By Stablecoin
A breakdown by stablecoin shows that over 76% of stablecoin transactions currently use USDT, with ~19% using USDC and ~5% for
BUSD. TUSD transactions are negligible.
17
https://www.businessofapps.com/data/paypal-statistics/
18
https://annualreport.visa.com/financials/default.aspx
19
https://www.nacha.org/news/ach-network-moves-30-billion-payments-77-trillion-2022-led-growth-same-day-ach-and-b2b#
20
https://www.frbservices.org/resources/financial-services/wires/volume-value-stats/annual-stats.html/
20
Transactions (#) – By Blockchain
Binance Smart Chain has the highest number of onchain stablecoin transactions, currently accounting for 40% of all transactions. This
results from Binance Smart Chain having a significant number of active addresses (~32% of active addresses) and those addresses
being extremely active. Year-to-date, the over 1mm weekly active addresses using USDT on BSC have each averaged 10.8
transactions per week, and the 300k+ weekly active addresses using BUSD on BSC have averaged 9.8 transactions per week. For
comparison, active addresses using USDT on Tron average 5.8 transactions per week, and those using USDC on Ethereum average
4.5 transactions per week.
Tron comes second with 32% of all stablecoin transactions on it, although there are times when Tron’s transactions surpassed Binance
Smart Chain’s transaction counts. Transaction count on Ethereum is low due to the high transaction costs and thus represents only 3%
of the number of stablecoin transactions. The other fast/cheap chains and L2s (Arbitrum, Optimism, Polygon, Avalanche, Fantom)
collectively represent 25% of transaction throughput.
Additional findings include:

- Since 2021, the chain with the highest transaction activity has oscillated between BSC and Tron, which are an order of
magnitude higher than the rest.
- As of June 2023, BSC has the highest transaction activity with 15mm transactions weekly, followed closely by Tron with 12mm
transactions weekly.
- Like active addresses, Ethereum, once a dominant blockchain for stablecoin activity, now only makes up for 3% of stablecoin
transactions at 1.2mm transactions weekly.
- Polygon is third in the number of transactions sent, with 4mm weekly transactions.
- Recent weekly transaction counts for the remaining blockchains are Arbitrum at 2.5mm, Avalanche at 1.2mm, Optimism at
1.1mm, and Fantom at 365k.
21
Transactions (#) – Blockchain / Coin Matrix
Weekly Transactions – 1H’23 Average
Ethereum 1,004,191 490,524 15,899 1,891 1,516,495
Tron 13,996,124 19,514 - 15,086 14,030,724
BSC 10,954,178 396,217 3,050,828 - 14,401,223
Polygon 1,497,337 1,816,903 - - 3,314,240
Optimism 126,893 1,302,308 - - 1,429,201
Arbitrum 577,755 1,642,924 - - 2,220,679
Fantom 118,113 530,744 - - 648,857
Avalanche 140,726 365,532 - - 35,532
TOTAL 28,415,317 6,564,666 3,060,727 16,977 37,926,951
Outstanding Supply
22
The total value of stablecoins outstanding is the most frequently cited metric when evaluating the growth of stablecoins (although we
believe other metrics such as onchain transaction volumes and active addresses are more important).
The growth of stablecoin supply has been extremely impressive, with growth from less than $3bn five years ago to over $120bn today
(after peaking at over $160bn). Outstanding supply has also shown resilience to the market downturn, with the market cap of
stablecoins currently being down ~24% from its peak, compared with a ~57% decline for the overall crypto market cap. This resilience
is impressive considering that stablecoins pay no interest to holders, while dollars held in Treasuries or money market accounts now
provide ~5% interest.
23
The chart below shows stablecoin and total crypto market cap, with significant events noted. Although events such as the collapses of
Terra, FTX, and SVB, and the Paxos/BUSD regulatory actions have impacted stablecoins, this effect has been muted compared with the
much greater volatility in the broader crypto market.
24
Outstanding Supply – By Stablecoin
As of June 2023, USDT had the highest supply of $87bn, followed by USDC ($29bn), BUSD ($5bn), and TUSD ($3bn). 
The area in blue below shows BUSD and its declining supply. After the SEC’s Wells Notice to Paxos alleging that BUSD was a security
and the NYDFS ordering the halt of BUSD issued on BSC, the outstanding supply has fallen by ~80%. The supply of USDC has also
decreased and is down 37% since the SVB collapse and 44% from its ATH. Meanwhile, USDT has been reaching ATHs in outstanding
supply.
25
Outstanding Supply – By Blockchain
A breakdown by blockchain shows 55% of stablecoins on Ethereum and 36% on Tron. Omni (on the Bitcoin blockchain) initially
accounted for almost all stablecoin issuance but now has less than 1% of stablecoin supply. Note that we did not include the Omni
blockchain in other sections of this report since it is no longer a meaningful blockchain for stablecoin activity. However, we included
Omni in this Outstanding Supply section to show the historical dominance of USDT on Omni.
Additional notable findings:
- Ethereum has the highest outstanding supply of stablecoins with $69bn and has declined 35% since peaking at $107bn. It
is interesting to contrast the percentage of stablecoin supply on Ethereum (55%) and the percentage of stablecoin value
settled on Ethereum (close to 50%) with the percentage of weekly active addresses and percentage of transactions
settled on Ethereum (6% and 3% respectively). This can be explained by Ethereum's use for higher-value holdings and
transactions. The average stablecoin transaction on Ethereum is 13x the value of the average stablecoin transaction on
Tron and almost 75x the average stablecoin transaction on BSC.
- Tron has about 2/3rd of the stablecoin supply of Ethereum but is up 19% YTD. BSC is third with $5bn of stablecoin
supply. SEC and NYDFS actions have driven down the outstanding supply of BUSD, the primary stablecoin on BSC.
Today, stablecoins on BSC are down 56% since the ATH in August 2022.  
26
- Ranking the rest of the blockchains/L2s in the order of highest outstanding supply - Arbitrum ($1.5bn), Polygon ($1.2bn),
Avalanche ($1.1bn), Omni ($850mm, down from ~$3bn at peak), Optimism ($430mm) and Fantom ($266mm).
27
Outstanding Supply – Blockchain / Coin Matrix
Outstanding Supply ($mm)
Ethereum $39,150 $26,270 $4,130 $640 $70,190
Tron $42,700 $590 - $2,280 $45,570
BSC $3,380 $530 $1,250 - $5,160
Polygon $590 $610 - - $1,200
Optimism $100 $330 - - $430
Arbitrum $470 $1,070 - - $1,540
Fantom $80 $180 - - $260
Avalanche $650 $470 - - $1,120
Omni $840 - - - $840
TOTAL $87,960 $30,050 $5,380 $2,920 $126,310
Summary Blockchain / Coin Matrix
Below is a summary of the data presented in the previous four matrices for each major stablecoin/blockchain combination.
YTD Weekly Average

Supply ($mm) Active Addresses Transaction Volume ($mm) Transactions (#)
USDT - Total $87,960 3,967,550 $109,731 28,415,317
USDT - Ethereum $39,150 264,777 $30,224 1,004,191
USDT - Tron $42,700 2,405,015 $66,709 13,996,124
USDT - BSC $3,380 1,017,846 $8,423 10,954,178
USDT - Other $2,730 279,912 $4,374 2,460,824
USDC - Total $30,050 654,805 $79,210 6,564,666

USDC - Ethereum $26,270 109,321 $63,941 490,524
USDC - Polygon $610 186,194 $2,132 1,816,903
USDC - Arbitrum $1,070 137,184 $4,049 1,642,924
USDC - Other $2,100 222,106 $9,088 2,614,315
BUSD - Total $5,380 315,154 $7,665 3,060,727

BUSD - Ethereum $4,130 4,942 $4,753 15,899
BUSD - BSC $1,250 310,212 $2,911 3,050,828
28
Holdings By Entity Type
The distribution of stablecoins among entity types can help indicate how stablecoins are being used. Stablecoins on exchanges
generally indicate speculative usage, while coins held in EOAs are more likely to be used for non-speculative purposes. Stablecoins
held in smart contracts could either be for speculative purposes (e.g., DEXs) or simply stored in smart contract / multi-signature wallets.
Adding more context to legends here:
o EOA (Externally Owned Accounts, which are individual non-exchange wallets 21)
o Exchanges (Addresses of all major exchanges)
o Smart-contracts-known (Covers all major Defi / NFT / Treasuries / Multi-sigs)
o Unknown-smart-contracts
21
The EOA category could also include some addresses used by exchanges that have not been tagged as exchange wallets by data vendors.
29
As of June 2023, EOAs cumulatively hold the highest amount of stablecoins with $72b or 56% of outstanding supply. The distribution of
stablecoins is then followed by exchanges, known smart contracts, and unknown/miscellaneous smart contracts with $39bn, $14bn,
and $1.8bn held, respectively.
30
Notably, coins held in EOAs are close to all-time highs, while exchange and smart contract holdings are down ~40% from ATHs.
31
Holdings by Entities – By Stablecoin
USDT and USDC have nearly 60% of their supply in EOAs. The same cannot be said for BUSD and TUSD. An overwhelming ~75% of
BUSD and ~85% of TUSD is on CEXs, predominantly Binance. This is indicative that both TUSD and BUSD are primarily used for
trading on exchanges and not so much for defi or non-speculative use cases.
Holdings by Entities – By Blockchain
Notable findings from examining the holdings by entity type across different blockchains:
- Stablecoins’ supply on Tron has shifted from over 90% being on exchanges at one point to only 37% ($17b) as of June this
year. Tron supply in EOAs has gone from less than 5% to over 60% ($28b), while supply on smart contracts is a meager ~1%.
- Another noticeable trend among L2s such as Arbitrum and Optimism is that neither EOAs nor exchanges hold most of the
stables; instead, smart contracts are where most of the supply is coalescing.
o On Arbitrum, 45% of stablecoins are in smart contracts, followed by 35% on EOAs and 19% on exchanges.
o Similarly, on Optimism, 45% of stablecoins are in smart contracts, 18% in EOAs, and 36% on exchanges.
o The high concentration of stablecoins in smart contracts may suggest that these blockchains are predominantly used
by DeFi power users.
32
Holdings By Balance
The below chart shows the breakdown of addresses holding stablecoins by the number of coins they hold. The number of addresses
holding stablecoins has been exponentially increasing since 2019.  As of June, over 50mm addresses hold stablecoins, up 43% YTD.
Some additional observations:
- 97% of addresses that hold stablecoins hold less than $1,000.

- Close to 20mm addresses hold between $1-$100. Of the addresses that hold at least $1, 80% hold between $1-$100.
- ~25mm addresses hold <$1. These addresses could represent very low-balance users or leftover balances from
swaps/transfers where not all the stablecoins are sent/used, leaving behind small residues of balances.
o Interestingly, leftover balances represent stablecoin supply that will likely never be redeemed and could provide the
issuer with perpetual interest income.  
33
Holdings by Balances – Further Analysis
An interesting observation is that addresses holding between $1-$100 (graph below) were largely unaffected by FTX’s collapse and
have been showing relentless growth barring a (4%) drop in the weeks after FTX’s collapse. This behavior could be explained by
looking at these addresses as users who are insulated from crypto macro trends and were more oriented towards non-speculative use
cases such as payments/spending.
  
Conversely, addresses with balances between $100 and $10,000 had a stark drop in their counts post FTX, although this trend has
reverted since the start of 2023. The reduction in the count of these addresses is also in contrast to the increase in the number of
addresses with larger balances, signaling that users may have consolidated their holdings into fewer or moved them to more secure
avenues (such as CEXs, multi-sig wallets, or third-party custodians).
See graphs on the next page for the number of addresses in each holdings range.
34
35
Conclusion
The relentless rise of stablecoins is one of the most exciting developments in the web3 / crypto space. It represents the most dramatic
case of web3 technology having clear product/market fit and providing tangible benefits to millions worldwide. In just a few years,
stablecoins have grown into a globally significant money movement rail, with millions of users sending tens of millions of transactions
and hundreds of billions of dollars in value every single week.
The rapid growth of stablecoin usage may surprise some US readers for whom the value proposition of stablecoins does not strongly
resonate 22. However, stablecoin adoption is an inherently global phenomenon, as one of the primary value propositions of stablecoins
is that they can provide basic, dollar-based financial services (an account to receive, hold, and send dollars) to almost anyone with an
internet connection. Jeremy Allaire, the CEO of Circle, recently highlighted 23 that they estimate 70% of USDC adoption is non-US, and
we believe that the non-US usage of USDT is significantly higher.
In our study of the rise of stablecoins, we have been most encouraged by signs that non-speculative use cases worldwide may be
driving the majority of stablecoin usage 24. These signs include the low correlation between crypto trading volumes and stablecoin
transactions, the relentless growth of weekly active stablecoin users throughout a crypto bear market, the low percentage of stablecoins
held on exchanges, and the high percentage of wallets holding and transacting in small dollar amounts.
We are still in the very early stages of global stablecoin adoption. In the coming years, we expect stablecoins will grow to trillions of
dollars of outstanding supply and hundreds of trillions of dollars in annual transaction value. We also expect stablecoins will increasingly
provide financial services to the global unbanked and underbanked, provide an escape from high-inflation currencies, and ignite an
explosion of innovation built upon these new global open-network money movement rails.
At Brevan Howard Digital, we are actively looking to partner with and invest in the innovators building the next generation of finance
using stablecoins.
22
These readers may also be surprised by the usage of the Tron blockchain, which is less commonly used in the US.
23
https://twitter.com/jerallaire/status/1688672056898928640
24
The Circle team, and in particular Gordon Liao, have also conducted extensive research on the growing use of stablecoins for non-speculative activity and their research is
recommended further reading: https://www.circle.com/en/policy-hub/economics
36
Methodology
For this study, the authors queried transaction history from the start of stablecoin issuance on each blockchain using data provided by
Dune, Allium, and CoinMetrics, and then built tables for volumes, transactions, outstanding supply, etc. We took a bottom-up approach
where each blockchain and stablecoin was studied individually, and then the data was consolidated to give a high-level analysis of the
metrics analyzed. The data was plotted on a third-party platform (Hex Tech). The result is seventy-one different dashboards comprising
hundreds of graphs, which were distilled to present the findings in this report. Thank you to the CoinMetrics and Messari teams for their
assistance with this analysis and the Allium team, in particular for their help with Tron data.
37
Important Legal Information & Disclaimer
This document has been prepared by Brevan Howard Asset Management LLP (“BHAM”). BHAM is authorised and regulated by the Financial Conduct
Authority of the United Kingdom (the “FCA”). Brevan Howard Capital Management LP (“BHCM”), BHAM, and each of their affiliates are collectively
referred to in this document as “Brevan Howard”.
In the United States, this document is communicated by Brevan Howard US LLC, a Delaware limited liability company, registered as a broker-dealer
under the U.S. Securities Exchange Act of 1934, as amended, and under various state securities laws, and is a member of the Financial Industry
Regulatory Authority, Inc.
The commentary contained in this document represents the personal views of its authors and does not constitute the formal view of Brevan Howard. It
does not constitute investment research and should not be viewed as independent from the trading interests of the Brevan Howard funds. The views
expressed in the document are not intended to be and should not be viewed as investment advice. This document is provided for information purposes
only and does not constitute an invitation, recommendation, solicitation or offer to subscribe for or purchase any securities, investments, products or
services, or any investment fund managed by BHCM, BHAM or any of their affiliates, or to adopt any investment strategy, nor shall it, or the fact of its
distribution or communication, form the basis of, or be relied on in connection with any contract. This document is not intended to provide a sufficient
basis on which to make any investment decision. Unless expressly stated otherwise, the opinions are expressed as at the date stated in the document
header and are subject to change. No obligation is undertaken to update any information, data or material contained herein.
Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this
material is at the sole discretion of the reader. Investment involves risks. International investing involves additional risks, including risks related to foreign
currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other
developments.
The two main risks related to fixed income investing are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding
decline in the market value of bonds. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest
payments.
This document has been provided specifically for the use of the intended recipient only and must be treated as proprietary and confidential. It may not be
passed on, nor reproduced in any form, in whole or in part, under any circumstances without express prior written consent from Brevan Howard.
Without limitation to the foregoing, any text and statistical data or any portion thereof contained in this document may not be permanently stored in a
computer, published, rewritten for broadcast or publication or redistributed in any medium, except with the express prior written permission of Brevan
Howard.
The information, data and opinions contained in this document are for background purposes only, are not purported to be full or complete and no
reliance should be placed on them.
Brevan Howard believes (but has not necessarily verified) that the sources of the information, data and opinions contained in this document are reliable.
However, Brevan Howard gives no guarantee, representation, warranty or undertaking, either express or implied, regarding and accepts no liability,
responsibility or duty of care for, the accuracy, validity, timeliness or completeness of any such information, data or opinion (whether prepared by Brevan
Howard or by any third party) or that it is suitable for any particular purpose or use or it will be free from error. To the extent that any further information,
data or material is provided in relation to the investments, products or services referred to herein, no representation is made that any such further
information, data or material will be calculated or produced on the same basis, or in the same format, as contained in this document. No obligation is
undertaken to update any information, data or material contained herein.
38
Certain information contained in this document may be “forward-looking statements”, which can be identified by the use of forward-looking terminology
such as “may”, “will”, “should”, “expect”, “anticipate”, “project”, “estimate”, “intend”, “continue”, “target”, “believe”, the negatives thereof, other variations
thereon or comparable terminology. Due to various risks and uncertainties, actual events, results or performance may differ materially from those
reflected or contemplated in such forward-looking statements.
Any projections or analyses provided to assist the recipient of this document in evaluating the matters described herein may be based on subjective
assessments and assumptions and may use one among alternative methodologies that produce different results. Accordingly, any projections or
analyses should not be viewed as factual and should not be relied upon as an accurate prediction of future results. Hypothetical or simulated
performance results have certain inherent limitations.
This document is only being made available to such persons and in such jurisdictions as it may be lawfully provided. The information herein should not
be relied or acted on by any other person.
Digital Asset Risk Factors
Unique Features of Digital Assets: Crypto currencies are not legal tender in the United States. The level of the intrinsic values of digital assets may be
subject to a broad spectrum of opinions. The price of many digital assets is based on the agreement of the parties to a transaction. There are specific
risks associated with the unique features of digital assets which need to be understood.
Price Volatility: The price of a digital asset is based on the perceived value of the digital asset and can be subject to changes in sentiment, which may
make these products highly volatile. Certain digital assets, such as some crypto currencies have experienced daily price volatility of more than 20%.
Prospective investors should be aware of the potentially extreme price volatility of some digital assets and the possibility of rapid and substantial price
movements, which could potentially result in significant losses.
Valuation and Liquidity: Digital assets can be traded through privately negotiated transactions and through numerous digital assets exchanges and
intermediaries around the world. The lack of a centralised pricing source may pose a variety of valuation challenges. In addition, the dispersed liquidity
may pose challenges for market participants trying to exit a position, particularly during periods of stress. Brevan Howard has valuation policies and
procedures for assets, including digital assets, that take into account their access to liquidity and the volatility of relevant markets.
Cybersecurity: The cybersecurity risks of crypto currencies and related “wallets” or spot exchanges include hacking vulnerabilities and a risk that
publicly distributed ledgers may not be immutable. A cybersecurity event could potentially result in a substantial, immediate and irreversible loss for
market participants that trade digital assets. Even a minor cybersecurity event in a digital asset is likely to result in downward price pressure on that
product and potentially other digital assets.
Technology: The relatively new and rapidly evolving technology underlying digital assets introduces unique risks. For example, a unique private key is
required to access, use or transfer a crypto currency on a blockchain or distributed ledger. The loss, theft or destruction of a private key may result in an
irreversible loss. The ability to participate in forks (a change in the blockchain’s protocol that the software uses to decide whether a transaction is valid or
not) could also have implications for investors. For example, a market participant holding a crypto currency position through a crypto currency exchange
may be adversely impacted if the exchange does not allow its customers to participate in a fork that creates a new product.
Opaque Spot Market: Crypto currency balances are generally maintained as an address on the blockchain and are accessed through private keys,
which may be held by a market participant or a custodian. Although crypto currency transactions are typically publicly available on a blockchain or
distributed ledger, the public address does not identify the controller, owner or holder of the private key. Unlike bank and brokerage accounts, digital
assets exchanges and custodians that hold digital assets do not always identify the owner. The opaque underlying or spot market may pose asset
verification challenges for market participants, regulators and auditors and potentially give rise to an increased risk of manipulation and fraud.
Digital Asset Exchanges, Intermediaries and Custodians: Digital asset exchanges, as well as other intermediaries, custodians and vendors used to
facilitate digital assets transactions, are relatively new and largely unregulated in both the United States and many foreign jurisdictions. Crypto currency
39
exchanges generally purchase crypto currencies for their own account on the public ledger and allocate positions to customers through internal
bookkeeping entries while maintaining exclusive control of the private keys. Under this structure, crypto currency exchanges collect large amounts of
customer funds for the purpose of buying and holding virtual currencies on behalf of their customers. The opaque underlying spot market and lack of
regulatory oversight potentially creates a risk that a crypto currency exchange may not hold sufficient crypto currencies and funds to satisfy its
obligations and that such deficiency may not be easily identified or discovered. Many digital asset exchanges have experienced significant outages,
downtime and transaction processing delays and may have a higher level of operational risk than regulated futures or securities exchanges.
Regulatory Landscape: Digital assets currently face an uncertain regulatory landscape in the United States and many foreign jurisdictions. In the
United States, digital assets are not subject to federal regulatory oversight but may be regulated by one or more state regulatory bodies. In addition,
many digital asset derivatives are regulated by the CFTC, and the SEC has cautioned that many initial coin offerings are likely to fall within the definition
of a security and subject to U.S. securities laws. One or more jurisdictions may, in the future, adopt laws, regulations or directives that affect digital asset
networks and their users. Such laws, regulations or directives may impact the price of digital assets and their acceptance by users, merchants and
service providers.
Transaction Fees: Many crypto currencies allow market participants to offer miners (i.e., parties that process transactions and record them on a
blockchain or distributed ledger) a fee. A fee is generally necessary to ensure that a transaction is promptly recorded on a blockchain or distributed
ledger. The amounts of these fees are subject to market forces and it is possible that the fees could increase substantially during a period of stress. In
addition, digital asset exchanges, wallet providers and other custodians may charge high fees relative to custodians in many other financial markets.
Digital Asset Derivatives: Digital asset derivatives may experience significant price volatility and the initial margin for digital asset derivatives may be
set as a percentage of the value of a particular contract, which means that margin requirements for long positions can increase if the price of the contract
rises. In addition, some futures commission merchants may pose restrictions on customer trading activity in digital asset derivatives, such as requiring
additional margin, imposing position limits, prohibiting naked shorting or prohibiting give-in transactions. The rules of certain designated contract markets
impose trading halts that may restrict a market participant's ability to exit a position during a period of high volatility.
The above summary risk factors do not purport to be a complete description of the relevant risks of an investment in the Funds and therefore
reference should be had to the prospectus or offering documents of the Funds and related offering documentation for a more detailed
description of these and other relevant risks prior to making any investment.
Digital Asset Disclaimer
BREVAN HOWARD CAPITAL MANAGEMENT LP IS A MEMBER OF NFA AND IS SUBJECT TO NFA'S REGULATORY OVERSIGHT AND
EXAMINATIONS. BREVAN HOWARD CAPITAL MANAGEMENT LP HAS ENGAGED OR MAY ENGAGE IN UNDERLYING OR SPOT VIRTUAL
CURRENCY TRANSACTIONS IN A COMMODITY POOL. ALTHOUGH NFA HAS JURISDICTION OVER BREVAN HOWARD CAPITAL
MANAGEMENT LP AND ITS COMMODITY POOL, YOU SHOULD BE AWARE THAT NFA DOES NOT HAVE REGULATORY OVERSIGHT
AUTHORITY FOR UNDERLYING OR SPOT MARKET VIRTUAL CURRENCY PRODUCTS OR TRANSACTIONS OR VIRTUAL CURRENCY
EXCHANGES, CUSTODIANS OR MARKETS. YOU SHOULD ALSO BE AWARE THAT GIVEN CERTAIN MATERIAL CHARACTERISTICS OF THESE
PRODUCTS, INCLUDING LACK OF A CENTRALIZED PRICING SOURCE AND THE OPAQUE NATURE OF THE VIRTUAL CURRENCY MARKET,
THERE CURRENTLY IS NO SOUND OR ACCEPTABLE PRACTICE FOR NFA TO ADEQUATELY VERIFY THE OWNERSHIP AND CONTROL OF A
VIRTUAL CURRENCY OR THE VALUATION ATTRIBUTED TO A VIRTUAL CURRENCY BY BREVAN HOWARD CAPITAL MANAGEMENT LP.
© Brevan Howard Capital Management LP (2023).
40

Visa Solana - The Relentless Rise of Stablecoins

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Visa Solana - The Relentless Rise of Stablecoins

Uploaded by

Copyright:

Available Formats

The

By Peter Johnson and

Important Legal Information & Disclaimer ........................................................................................................................................... 38

(See detailed graphs for each stablecoin on the following page)

Weekly Active Addresses – 1H’23 Average

USDT USDC BUSD TUSD TOTAL

Ethereum 264,777 109,321 4,942 729 379,769

Tron 2,405,015 5,165 - 2,679 2,412,859

BSC 1,017,846 47,641 310,212 - 1,375,699

Polygon 146,861 186,194 - - 333,055

Optimism 14,234 74,610 - - 88,844

Arbitrum 80,250 137,184 - - 217,434

Fantom 2,617 31,093 - - 33,710

Avalanche 35,950 63,597 - - 99,547

TOTAL 3,967,550 654,805 315,154 3,408 4,940,917

- Tron now settles about ~$70bn of weekly onchain stablecoin volume.

Weekly Volume Sent - 1H’23 Average

USDT USDC BUSD TUSD TOTAL

Ethereum $30,224,420,033 $63,941,183,280 $4,753,494,547 $304,727,934 $99,223,825,794

Tron $66,709,346,266 $1,564,517,928 - $937,698,853 $69,211,563,047

BSC $8,422,655,961 $1,341,955,058 $2,911,315,637 - $12,675,926,656

Polygon $1,335,538,953 $2,131,923,837 - - $3,467,462,790

Optimism $345,586,721 $4,719,456,370 - - $5,065,043,091

Arbitrum $1,915,821,916 $4,048,643,291 - - $5,964,465,207

Fantom $109,208,291 $329,255,418 - - $438,463,709

Avalanche $668,283,596 $1,132,753,279 - - $1,801,036,875

TOTAL $109,730,861,737 $79,209,688,461 $7,664,810,184 $1,242,426,787 $197,847,787,169

PayPal 17 $1.4 tn 22.3 bn 0.13x 17.15x

Visa 18 $11.6 tn 192.5 bn 1.05x 148.08x

ACH 19 $76.7 tn 30.0 bn 6.91x 23.08x

Fedwire 20 $1,060.3 tn 0.2 bn 95.50x 0.15x

Transactions (#) – By Stablecoin

Additional findings include:

Weekly Transactions – 1H’23 Average

USDT USDC BUSD TUSD TOTAL

Ethereum 1,004,191 490,524 15,899 1,891 1,516,495

Tron 13,996,124 19,514 - 15,086 14,030,724

BSC 10,954,178 396,217 3,050,828 - 14,401,223

Polygon 1,497,337 1,816,903 - - 3,314,240

Optimism 126,893 1,302,308 - - 1,429,201

Arbitrum 577,755 1,642,924 - - 2,220,679

Fantom 118,113 530,744 - - 648,857

Avalanche 140,726 365,532 - - 35,532

TOTAL 28,415,317 6,564,666 3,060,727 16,977 37,926,951

Additional notable findings:

Outstanding Supply ($mm)

USDT USDC BUSD TUSD TOTAL

Ethereum $39,150 $26,270 $4,130 $640 $70,190

Tron $42,700 $590 - $2,280 $45,570

BSC $3,380 $530 $1,250 - $5,160

Polygon $590 $610 - - $1,200

Optimism $100 $330 - - $430

Arbitrum $470 $1,070 - - $1,540

Fantom $80 $180 - - $260

Avalanche $650 $470 - - $1,120

Omni $840 - - - $840

TOTAL $87,960 $30,050 $5,380 $2,920 $126,310

Summary Blockchain / Coin Matrix

YTD Weekly Average

USDT - Tron $42,700 2,405,015 $66,709 13,996,124

USDT - BSC $3,380 1,017,846 $8,423 10,954,178

USDT - Other $2,730 279,912 $4,374 2,460,824

USDC - Total $30,050 654,805 $79,210 6,564,666

USDC - Polygon $610 186,194 $2,132 1,816,903