Tether outpaces Visa and Mastercard in 2022 transactions

Tether, a leading stablecoin in the cryptocurrency market, processed a staggering $18.2 trillion in transactions in 2022, surpassing traditional payment processors Visa and Mastercard. According to a tweet on January 14, Mastercard and Visa processed transactions worth $14.1 trillion and $7.7 trillion respectively.

This high transaction volume is a testament to the massive growth of stablecoins over the past years. Despite the challenges facing the crypto industry, stablecoins have thrived, particularly in countries where the current economic situation has placed their national fiat currency at a disadvantage.

However, Tether had a somewhat difficult year in 2022. Over the past year, concerns were raised about Tether's reserves and solvency following the collapse of Terra UST in May and the FTX crypto exchange in November. The stablecoin briefly lost its peg to the US Dollar at the height of Terra's crash FUD. During this period, Tether honored over $10 billion in redemptions. BeinCrypto later reported that several traditional financial institutions took short positions against USDT because of the speculations surrounding its financial health.

While Tether remains the dominant stablecoin in the crypto market, its rivals like USDC and BUSD recorded victories against it in 2022. Tether's market cap declined from a peak of $83.13 billion to as low as $65.31 billion over the reporting period. On the other hand, USDC's market cap grew to $56 billion before declining.

Centralized crypto exchanges like Coinbase urged its users to convert their USDT holdings into USDC. More recently, Crypto.com delisted USDT for its Canadian users, citing regulatory compliance measures. Glassnode data showed that USDC's transfer volumes exceeded that of USDT almost five times towards the end of 2022. USDC's adoption has grown because investors believe it is a safer option than USDT. USDC's assets are backed by cash or short-term United States treasuries, and global accounting firm Grant Thornton audits it. On the other hand, Tether has not been very forthcoming with its reserves or its audits.

These issues have made some crypto community members question Tether's data on its 2022 trading volume. Some attributed the metrics to wash trading, while others asked the stablecoin issuer to publish its reserves. Overall the year 2022 has shown that despite the challenges Tether faces, the stablecoin market has grown significantly, with more people using and trusting the technology, proving that stablecoin adoption is here to stay.