Stablecoin volumes stay strong as FDUSD hits record high, while USDT declines

Monthly USD-pegged stablecoin volumes in April fell just short of beating the previous month despite First Digital USD FDUSD +0.063% having its best month on record. 

FDUSD volumes surpassed $18 billion, according to The Block Dashboard, more than doubling March's activity. "First Digital USD has been getting a boost since it became the prominent stablecoin on Binance," said The Block Research Analyst Rebecca Stevens. "Although this has been the case for a while, it's still helpful for its adoption."

Meanwhile, the world's largest USD stablecoin in terms of supply, Tether's USDT, saw volume slip to $205 billion from $243 billion in March. Cumulatively, April volumes came in at $546 billion, down from March's $587 billion, which was the highest monthly level in exactly one year. 

Ethena ENA -2.42% ’s USDe stablecoin has also been gaining momentum and crossed the $2 billion supply mark in early April, less than two months after its public launch in February. USDe volumes closed April above $13 billion, in on-chain volume, according to The Block Data Dashboard.

According to the same data, Circle's USDC -0.0057% continued in the top spot in terms of total volume with $275 billion, a slight decrease from March's $283 billion.

Some expect the stablecoin market to swell to as much as $2.8 trillion by 2028, but it appears to be becoming increasingly diverse and, potentially, competitive. In early April, Ripple said it would launch a USD-pegged stablecoin later this year. Ripple hopes enterprise clients and payment companies will be keen to adopt its new token.

"We've used USDC before [and] there's nothing wrong with it. It's just, you don't want to have only one option," Ripple Chief Technology Officer David Schwartz said at the time. He said Ripple mostly steers clear of USDT -0.043% due to regulatory concerns.

Stablecoin volume 'through the roof'

Gartner web3 analyst Avivah Litan points out that even during crypto's prolonged downturn following the collapse of cryptocurrency exchange FTX, stablecoin volumes remained fairly steady. She expects the market's expansion to accelerate in the months to come. 

"The fundamental stablecoin values plus the promise of continuing crypto trading acceleration, via spot bitcoin ETFs, bode extremely well for stablecoins’ futures," Litan told The Block. "I believe USD stablecoin annual settlement volume will easily surpass ACH and Visa annual settlement this year."

A few days ago, on-chain specialist Nansen said transaction volume for the three largest stablecoins — USDT, USDC and DAI — had bested Visa’s average monthly total for 2023.

"Now that the bull market is back and ETFs are issued, stablecoin volumes are going through the roof," said Litan, adding that people and institutions are cottoning on to the advantages of USD-pegged stablecoins.

The digital tokens are fully transparent while providing access to USD during a "time of global strife and uncertainty," said Litan.