Stablecoin Use Expands Beyond Exchange Trading, Notes CryptoQuant CEO

Traditionally associated with the exchange of digital assets, stablecoins are now being used more widely across the globe. The CEO of CryptoQuant, Ki Young Ju, emphasized this move to his 368,500 X followers, indicating a pattern that extends beyond cryptocurrency exchanges. According to Ju’s data, just about 21% of stablecoins are currently listed on exchanges, a significant drop from more than 50% in 2021. According to this statistics, stablecoins are becoming more useful for uses beyond than trade, such as transfers and wealth storage.

Stablecoin Market Growth Driven by New Use Cases

Back in 2021, exchange reserves of stablecoins surpassed $30 billion. Since then, the overall market cap has surged to $166 billion, with most stablecoins now being held off-exchange. Ju attributes this growth to the expanded use of stablecoins for transferring value across borders, noting that just one in five stablecoins is still primarily used in trading.

“Today, the stablecoin market cap is $166 billion, mainly used for storage or remittances, with only 21% held on exchanges (down from over 50% in 2021),” Ju stated. This shift reveals a diversification in stablecoin applications, driven by people and businesses increasingly leveraging them for secure international transfers.

Ju also pointed out that in regions like Africa, where economic instability and currency devaluation are ongoing concerns, stablecoin adoption is climbing at a rapid pace. “Stablecoin adoption in Africa is crazy as far as I know,” he said, highlighting how these digital assets are gaining traction as practical tools for cross-border payments.

Ju cautions that stablecoins cannot sustain a spike in Bitcoin (BTC) prices on their own, even though they add liquidity to the cryptocurrency ecosystem. He points out that the ratio of BTC reserves to stablecoin reserves is 6.05, which indicates that stablecoin holdings are greatly outnumbered by Bitcoin reserves. Ju thinks that in the upcoming months, alternative liquidity sources like Coinbase USD liquidity and ETF flows would be essential for a significant price increase.