Tether’s USDT Dominates 90% of Stablecoin Payment Volume on Tron

Tether’s USDT token and the Tron blockchain network are leading the rapidly expanding stablecoin payment industry, according to a report by analytics firm Artemis, with contributions from investment firms Dragonfly and Castle Island Ventures. The report, titled “Stablecoin Payments from the Ground Up,” analyzed data from 31 stablecoin payment companies and found that USDT, the largest stablecoin, accounted for 90 percent of payment transaction volume. Following USDT was Circle’s USDC, the second-largest stablecoin. Tron was identified as the preferred settlement network, hosting around 60 percent of the volume, with Ethereum, Binance Smart Chain, and Polygon following closely behind.

The snapshot of stablecoin payment volume, taken in February, amounted to an annualized $72.3 billion, covering various payment types and sectors including B2B, P2P, B2C, Card, and Lending. Stablecoins, which are predominantly U.S. dollar-pegged digital tokens, were initially used for convenient money parking while trading cryptocurrencies. However, these low-cost, instantly-settled financial instruments are now being widely adopted for payments across various sectors, with optimistic estimates on the potential size of that market coming from both crypto-native firms and major banks.

It is noteworthy that Circle’s USDC does not have a larger share in the market, despite the firm’s involvement in payments and recent plans to introduce a dedicated cross-border payments network. Circle, which recently filed for an initial public offering on the New York Stock Exchange, has been gaining market share from Tether in terms of issuance. However, this trend does not seem to be reflected in the payments volume, according to Dragonfly general partner Rob Hadick. “For the 31 providers we got data from at least, it’s clear that’s not the case for the payments use case,” Hadick said in an interview. “In fact, a higher portion of the volume, relative to the issuance, is happening with Tether, and it's happening primarily on Tron and then Ethereum. This was quite surprising to us.”

This perspective is influenced by the fact that a significant amount of business-to-business transactions, such as paying suppliers for global supply chains, occur between emerging markets and the U.S. In some of these markets, concerns about bank failures make Tether a trusted brand. Additionally, firms using stablecoins for payments are less concerned about the specific blockchain used for settlement. Tron’s speed and low cost, combined with the presence of over $60 billion of USDT on the chain, make it a practical choice. “If you go to Argentina or Brazil, people don’t say they want to use stablecoins, they say we use Tether,” Hadick said. “Tether is the brand that is ubiquitous with USD access, in the same way that in the U.S. Uber is ubiquitous with taking a car that you call from your phone.”