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Visa claims that 90 percent of stablecoin volume is bot-driven, Tether looks to improve transaction monitoring, and Binance’s new CEO calls for the release of a “mid-level” employee detained in Nigeria.
Visa has hit back at claims that its card network is about to be overtaken by stablecoins, arguing in a new study that almost all stablecoin volume is “inorganic”.
In a blog post entitled "Making Sense of Stablecoins", Cuy Sheffield, Visa’s head of crypto, said that 90 percent of global stablecoin volume is driven by bots.
Looking back at the previous 30 days of stablecoin transfer volume, Sheffield said the total comes to $2.65trn. However, when transactions likely initiated by bots are excluded, the remaining volume is about $265bn.
“There is a lot of noise in this data given that blockchains are general purpose networks where stablecoins can be used across a range of use cases, with transactions that can be initiated manually by an end user or programmatically through bots,” said Sheffield.
For example, developers can create automated bot programs that perform functions such as stablecoin arbitrage, liquidity provision and market making.
“These activities are vital for sustaining the growing decentralised finance ecosystem,” said Sheffield. “However, the onchain transactions resulting from interactions with these automated programs don't resemble settlement in the traditional sense.”
Visa published the blog in response to a viral post from Nic Carter, a partner of Castle Island Ventures and co-founder of Coinmetrics.
Using a graph that has been widely circulated since late 2023, Carter said that stablecoins are “catching up” to established settlement networks such as Visa, ACH and Fedwire.
He also claimed that global stablecoin volume has already surpassed the volume of PayPal and the remittance market.
Source: Nic Carter, Castle Island Ventures
“Taken at face value, it’s an interesting chart,” said Sheffield. “But I’d argue that this comparison doesn’t really tell the full story.”
Sheffield was able to respond to Carter while showcasing a new partnership between Visa and Allium Labs, a blockchain data provider.
This week, Visa and Allium launched the Visa Onchain Analytics Dashboard, a platform that aims to provide insights into stablecoin activity, and which also provided the data for Visa’s counter-claims.
While Sheffield described the programmability of blockchain payments as “unique”, he also said it is unfair to compare bot-initiated transactions with organic transactions, such as those that drive the Visa network.
Tether partners with Chainalysis on transaction monitoring
Tether has announced a new partnership with blockchain intelligence firm Chainalysis, which it will use to monitor its secondary market.
The secondary market refers to transactions using USDT that take place outside direct buying and selling of USDT from Tether.
Tether said Chainalysis’ products will offer “enhanced oversight” of the USDT market and will serve as a source of intelligence for its compliance and investigation teams.
A Chainalysis "Sanctions Monitoring" tool will aim to flag addresses and transactions associated with sanctioned entities, and will also categorise these entities as actors such as exchanges or darknet markets.
A "Largest Wallet Analysis" tool will provide oversight of significant USDT holders and their activities, and an "Illicit Transfers Detector" will identify transactions potentially associated with activities such as money laundering and terrorist financing.
Despite Tether’s partnership with Chainalysis, there is no guarantee that it will keep the world’s largest stablecoin issuer out of the cross-hairs of enforcement action.
In 2018, Binance also partnered with Chainalysis and deployed its solutions to tackle crypto money laundering. But in 2023, Binance pleaded guilty to a range of anti-money laundering (AML) failures, including violations that took place during the Chainalysis partnership.
Binance CEO calls for 'immediate release' of detained colleague
Richard Teng, Binance’s new CEO, has called for the “immediate release” of a colleague who was detained in Nigeria and later charged with tax evasion and money laundering.
Tigran Gambaryan, head of financial crime compliance at Binance, travelled to Nigeria in February at the height of a dispute between the crypto exchange and the Nigerian government.
In addition to allegations of operating in the country illegally, the government accused Binance of facilitating billions of dollars in capital flight and crashing the value of the naira.
In a blog post published this week, Teng claims that Gambaryan, a US citizen, was not sent to Nigeria to “negotiate” with regulators or law enforcement, as was initially reported by the media.
“It is important to note that Tigran did not go to Nigeria as a ‘decision-maker’, nor a ‘negotiator’,” said Teng. “He was merely acting as a functional expert in financial crime and capacity building in policy discussions.”
According to Teng, Gambaryan and another colleague, Binance’s head of Africa, Nadeem Anjarwalla, were given “multiple assurances” of “safe passage” before travelling to Nigeria.
When they arrived in the country, Teng said that talks between the two sides began in a “neutral” fashion, and did not turn “hostile” until the issue of currency devaluation was raised.
The Nigerian delegates then demanded that Binance immediately delist the naira, hand over “granular-level” details on all Nigerian users and provide tax and financial information.
Gambaryan and Anjarwalla were then told that they would be detained until the government’s demands were met.
Shortly after the demands were issued, Binance delisted the naira but kept Gambaryan and Anjarwalla under detention.
Gambaryan is now facing criminal charges, while Anjarwalla escaped to Kenya and was later arrested, where he is now facing an extradition order.
“At the end of the day, Binance wants to have a future where we work alongside the Nigerian government to be part of building a strong economy for the Nigerian people,” said Teng.
“But this crisis must come to a resolution quickly, and Tigran must be allowed to go home if we’re going to move forward.”
