Stablecoins drive $1.2 trillion in transactions in 3 yrs

Stablecoins and digital asset classes have generated more than $1.2 trillion in transactional volume since 2017, according to a new report which highlights the growth of the blockchain across financial services and a host of other industries.

The global blockchain trends survey compiled by Invesco and Cambridge Judge Business School’s Centre for Alternative Finance has tracked rapid growth across the blockchain industry in the past 18 months, with distributed ledger technologies opening up new opportunities for investors.

Organisations have begun commercialising enterprise blockchain networks across multiple sectors such as insurance, banking, trade financing and shipping, and in many cases have now achieved scale, the report found.

In financial products, while the popular focus is on cryptocurrencies, other assets are growing quickly, according to the report. These include digital fiat currencies, digital securities that are modernising capital markets, and a broader tokenisation of existing physical assets.

The growth of stablecoin offerings should also scale up following the planned rollout of Facebook’s Diem stablecoin and broader central bank digital currency (CBDC) pilots in Shenzhen and three other cities in China.

A number of new permissionless blockchain networks have also recently launched to address enterprise applications, and there is increasing cross-over between permissionless and permissioned tracks.

The report’s authors said that the Ethereum network has established itself as the “undisputed market leader” for smart contract applications thanks to widely used token standards and readily available software tooling that facilitates application development on top of the network.

Beyond finance, commercial blockchain networks have also been established across multiple sectors including trade and manufacturing, with 50 per cent of the world’s total container traffic has now been committed to run on blockchain.

Commenting on the report, Keith Bear, fellow at Cambridge Judge Business School’s Centre for Alternative Finance said: “The crescendo of activity on central bank digital currency, stablecoins and tokenised assets points to major new means of facilitating trade, payments and investments in the evolving digital economy.

He added:“What has largely been a retail-driven market is now becoming more institutional, as ‘unicorns’ and start-ups, brokerages, custodians, institutional trading platforms and global banks build a range of digital asset products and services. Decentralised and enterprise blockchain applications are also on the rise, supported by the growth of extensive software libraries and developer tooling.”

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