In July, spending on cryptocurrency payment cards surged to $759 million, approximately 2.5 times more than the same month a year earlier. According to a16z crypto, USD-backed $USDC now accounts for 58% of this volume.
Dollar-backed stablecoins to replace euro in less than two years
In July, cardholders made approximately 9 million purchases, compared to about 5.2 million in the same month last year. This averages to about $86 per purchase.
These cards allow their owners to spend stablecoins anywhere traditional cards are accepted. At checkout, the cryptocurrency is converted into local currency, and the merchant receives a standard card payment.
Users either store stablecoins on the blockchain in their own account or deposit them with the card issuer. A traditional bank account is not required.
The provided data is primarily sourced from information stored on the blockchain and indexed directly. RedotPay, the largest by transaction volume, reports stablecoin spending only, not based on blockchain data.
As of early 2024, euro-backed stablecoins held the leading positions: about 88% of card transaction volume was conducted in EURe, most of which passed through the Gnosis blockchain. By July, EURe's share had fallen to approximately 2%.
According to a16z crypto, $USDC's 58% share has risen from about 48% a year ago. Over the same period, USDT's share increased from about 7% to about 26%. Nearly all card payments are now made in digital dollars.
Optimism, Solana, and Base facilitate significant stablecoin trading volume
Gnosis Pay launched the first Visa card directly linked to its own wallet, and in early 2024, nearly all card spending occurred on the Gnosis blockchain.
As of July, Optimism accounted for about 29% of card spending. Solana and Base each accounted for about 19%. Gnosis's share decreased to approximately 2%. The cards operate on the Visa network almost exclusively within trac programs.
In March, Visa and Bridge, a stablecoin infrastructure company owned by Stripe, announced plans to expand their stablecoin-based card issuance program to over 100 countries by the end of the year.
As reported by Cryptopolitan, the expansion will allow holders to use their stablecoin balances at over 175 million Visa-accepting merchant locations.
In January, Hasib Qureshi from Dragonfly stated that cards using stablecoins are "growing incredibly fast around the world."
Stablecoin payments lack the rewards and credit incentives that have fueled the adoption of card payments. The existing system "isn't actually broken for most merchants and consumers in developed markets," said Shil Mohnot of Better Tomorrow Ventures.
