KIF Study: Only 0.1% of US-Dollar Stablecoin Volume Is Retail Payments
A Korea Institute of Finance (KIF) study found that of $5.42 trillion in U.S. dollar-pegged stablecoin transactions tracked through November, just $7.5 billion — 0.1% — were retail payments for goods and services. Automated bot activity (arbitrage, liquidity provision, trading algorithms) accounted for $4.21 trillion (77.6%), while non-bot crypto trading made up roughly $1.21 trillion (22.3%). The report highlights that stablecoins mainly serve as a settlement layer within crypto and DeFi rather than replacing traditional payment rails. Key barriers to retail adoption include regulatory uncertainty, inferior consumer protections compared with cards/wallets, and poor user experience (gas fees, wallets, confirmations). The study suggests implications for policymakers — lower immediate systemic risk to fiat payments but a need for distinct regulatory approaches for settlement-focused versus consumer-focused stablecoins. Potential future drivers of retail uptake include clearer regulation, layer-2 scaling (lower costs, faster transactions), and improved merchant/payment integrations. Primary keywords: stablecoin, retail payments, DeFi, USDT, USDC, settlement. Secondary/semantic keywords included: arbitrage bots, liquidity providers, regulatory uncertainty, layer-2 scaling.
Neutral
The study is broadly neutral for market direction. It clarifies that most stablecoin volume is internal to crypto markets (bots, DeFi), which reduces immediate contagion risk to fiat payment systems and lessens the chance of sudden regulatory shocks tied to consumer payment disruption. For traders this means stablecoins will likely remain high-liquidity settlement assets, supporting on-chain trading and DeFi activity — a structurally positive feature for crypto market functioning. Short-term: limited impact on prices for major coins; stablecoin-driven liquidity supports trading volumes and may increase volatility during DeFi events but does not imply retail-driven demand growth. Long-term: if regulatory clarity, layer-2 scaling, or major payment integrations occur, stablecoins could gain retail traction, creating a bullish structural demand narrative. Conversely, prolonged regulatory friction would keep usage concentrated in trading/DeFi, maintaining current dynamics. Historical parallels: previous research showing tether and USDC dominance in trading volumes coincided with strong on-chain liquidity but not with mainstream payment adoption; those periods saw healthy trading volumes but no sustained retail-driven price appreciation. Overall, the finding reduces tail-risk from stablecoins migrating into mainstream payments immediately, while reinforcing their role as plumbing for crypto markets — a neutral outcome for directional market bias but important for liquidity considerations.