REPORT | Stablecoins Have Become Crypto’s Killer App Amid Blockchain Scaling Improvements, Says New a16z Report

By enabling fast, cheap, global payments, among other uses, stablecoins have become one of crypto’s most obvious ‘killer apps’, says a new report by a16z crypto.


According to the report, major scaling upgrades have drastically reduced the cost to execute crypto transactions, including those involving stablecoins, in some cases by over 99%.

“On Ethereum, transactions involving USDC, a popular U.S. dollar-pegged stablecoin, cost on average $1 in gas fees this month, down from $12 on average in 2021. Sending USDC on Base, Coinbase’s popular L2 network, costs less than a cent on average. (Note that these figures may exclude some onboarding and exit costs.)”

On the flipside, it costs $44 on average that to send an international wire transfer.


According to the report, stablecoins amounted to $8.5 trillion in transaction volume across 1.1 billion transactions in the second quarter of 2024 ended June 30.

“Stablecoin transaction volumes more than doubled Visa’s $3.9 trillion in transactions over the same period. That stablecoins have entered the same conversation as such well-known and entrenched payment services as VISA, PayPal, ACH, and Fedwire is a remarkable testament to their utility.”

Based on the data, stablecoins represent nearly a third of daily crypto usage at 32%, second only to decentralized finance, or DeFi, at 34%, as measured by share of daily active addresses. The rest of crypto’s usage is spread across infrastructure (bridges, oracles, maximum extractable value, account abstraction, etc.), token transfers, and a smattering of other areas, including emerging applications such as gaming, NFTs, and social networking.

The key reason is the scaling improvements witnessed in blockchains. Blockchains are processing more than 50 times as many transactions per second as they were just four years ago thanks to the rise of Ethereum L2 networks and other high-throughput blockchains.

“More staggeringly, Ethereum’s biggest upgrade of the year — “Dencun,” also called “protodanksharding” or EIP-4844 — significantly reduced fees for L2 networks after its implementation in March 2024. Since then, the fees paid by L2s on Ethereum have plummeted even as ETH-denominated value on L2s has continued to rise”

We are also witnessing a diversification in how the stablecoins are applied, particularly in emerging markets.

A separate VISA survey confirmed the growing usage of stablecoins in emerging markets, revealing that the coins are increasingly being used for reasons other than facilitating crypto trades.

According to the survey, of 2,500 active stablecoin users in India, Indonesia, Nigeria, Turkey, and Brazil:

• 47% of participants said they primarily use stablecoins to get dollar-access
• 43% said to get better currency conversion rates, and
• 32% said to send money internationally