Only 0.1% of U.S. stablecoin transactions are for retail payments… “KRW stablecoins’ role as a payment method is limited”

Just 0.1% of total stablecoin transaction value in the United States is used for everyday retail payment transactions, according to findings. As discussions over introducing won-pegged stablecoins have resumed, observers note there are limits to their effectiveness as a payment instrument.

According to a report published on the 2nd by the Korea Institute of Finance, stablecoin activity in the U.S. is used mostly not for payments but for fund transfers between exchanges, decentralized finance (DeFi) transactions, and inter-institution settlements. The amount used for actual retail payments accounted for only 0.1% of the total.

A survey by Visa, a global payment network operator, also found that as of last November, about 78% of the US$5.42 trillion in dollar stablecoin transaction value was attributed to automated bot trading. Even among the remaining non-bot transactions, the share used for retail payments was extremely limited. Retail payment volumes were US$7.5 billion per month, a negligible level compared with PayPal or Visa transaction volumes.

The report analyzed that in countries like South Korea, where credit card and mobile payment infrastructure is already well developed, stablecoins are unlikely to gain traction as a consumer payment method. Instead, it assessed that they are more likely to be used as wholesale financial infrastructure, such as for interbank settlement or asset transfers.

The Korea Institute of Finance said, “Discussions on won stablecoins should focus on the wholesale domain—rather than expanding retail payments—premised on safeguards to ensure financial stability and prevent illicit fund use.”