President Trump has also reportedly made handsome profits from stablecoins and the crypto sector, although the USD1 stablecoin he is associated with has been at the center of serious corruption allegations. Additionally, Wall Street veteran Tom Lee made headlines by referring to stablecoins as crypto’s chatGPT moment, echoing a report released by Citi earlier this year.
The crypto industry often points to blockchain data to prove that 2025 was indeed a record year for stablecoins in terms of adoption. However, a new report from McKinsey Financial Services shows that the metrics used to show how much stablecoin adoption has grown over the past few years are extremely misleading.
Raw blockchain transfers are often pointed to as evidence of stablecoin adoption, but the reality is that only a small percentage of this activity – about 1% of the approximately $35 trillion in total transaction volume – is actually related to real-world payments. This means that stablecoin adoption, which the report estimates at $390 billion by 2025, is just 0.02% of global payments.
According to the report, B2B payments and international remittances account for the majority of stablecoin payment activity, and activities such as crypto exchanges transferring funds between blockchain accounts, automated activity with smart contracts, and trading on decentralized exchanges should not be included in the payments measurement. The report also notes that approximately 60% of this activity is originating in Asia, with “today’s activity being almost entirely driven by payments sent from Singapore, Hong Kong and Japan.”
.@chainalysis After people claimed that centralized exchange users were fleeing to DeFi in response to the FTX debacle, attention was paid to decentralized exchange (DEX) activity on Ethereum.
It turns out that the increased DEX activity was mostly due to a single MEV bot frontrunning DeFi users. pic.twitter.com/ptkJw3SCoK
– Kyle Torpey (@kyletorpey) 18 November 2022
Of course, exaggerated or completely inaccurate adoption metrics are nothing new in the crypto world. Various data points, such as increased on-chain activity around decentralized finance (DeFi) apps, can be used to tell all kinds of tall stories. There has been a lot of hype over the past few years about metrics like transactions per second, which ignores what makes this technology valuable.
Despite the apparent exaggeration in the adoption of stablecoin payments by various entities in the crypto industry, the report also indicates that there are still signs of real growth. For example, the $390 billion in stablecoin payments due in 2025 is more than double that of last year. Additionally, the total supply of stablecoins has grown from less than $30 billion in 2020 to over $300 billion today.
Of course, this wasn’t all necessarily going to be adopted positively, as a report from blockchain analytics firm Chainalysis indicates that stablecoins now account for the vast majority of illicit crypto transfers. Reports have also pointed to the heavy use of Tether’s USDT stablecoin by the Maduro regime, and its adoption by the Central Bank of Iran shows why pro-stablecoin policy in the US is a double-edged sword.
More generally, the prominence of stablecoins in crypto has created a rift between cyberpunks focused on ideology and fintech startups focused strictly on adoption metrics. While stablecoins were originally seen as a boon for crypto adoption, it has now reached the point where stablecoin issuers are launching their own blockchain infrastructure, adding another layer of centralized control to the tech stack.
While people like the aforementioned Tom Lee see the issuance of stablecoins and other tokens based on real-world assets, such as tokenized stocks, as bullish for decentralized crypto networks like Ethereum, the question is how much value these open protocols will accrue or whether stablecoin issuers and other centralized entities can take these networks out of the equation altogether.
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