Looking back at recent stablecoin indicators, Solana brush
-3.31%
According to research and brokerage firm Bernstein, increasing market liquidity and improving investor sentiment are “leading the battle” for blockchain payments.
“The big change this cycle is Solana’s dominant market share in transferred stablecoin value (highest share at 43%) compared to market leader Ethereum in the previous cycle,” Gautam Chhugani and Mahika Sapra wrote in a note to clients on Tuesday. I wrote:
They argue that Solana’s single-layer design has led to an increase in stablecoin payments on the network due to its direct on-ramp to cryptocurrency exchanges, high throughput, and low transaction costs compared to the complexity of connecting to Ethereum Layer 2.
Stablecoin transfer volume. Image: Bernstein.
However, Solana still lags significantly behind Ethereum in terms of stablecoins issued on the blockchain, according to The Block’s data dashboard. 
USDC
-0.30%
Solana has a supply of $2.2 billion compared to $26.4 billion for Ethereum, the most popular stablecoin on the network, but is slowly gaining market share.
Analysts noted that despite pilots with Visa and Shopify beyond global payment networks for cross-border payments, Solana has yet to make inroads into mainstream consumer or B2B payments.
Chhugani and Sapra cited scalability requirements as a key bottleneck. Solana requires a 15-20x increase in transactions per second from about 700 TPS to over 10,000 TPS, but blockchains in general have not yet crossed that gap.
The Solana network has been suffering from congestion issues recently, which has resulted in noticeable delays in transaction processing and many transactions being dropped. Congestion is mainly caused by spam transactions, where bots attempt to prioritize their activities over regular users. The Solana development team is developing software patches and updates to address these issues, but deployment will take time.
Signs of revival in the stablecoin market
The stablecoin market peaked at $180 billion in 2021. However, as the cryptocurrency bear market took hold, the market capitalization fell 33%, falling to a low of $120 billion.
Analysts said, “As cryptocurrency market sentiment has improved since the end of 2023, stablecoins in circulation have returned to a growth path, with current circulating supply reaching $150 billion.”
tethers 
USDT
+0.041%
Circle’s USDC dominates stablecoin supply, accounting for 75% and 22% of the market, respectively.
Although stablecoin supply has increased, the value settled and transferred on blockchains like Ethereum has remained “flat” at around $5 trillion in 2023, compared to $7 trillion in 2022, analysts noted.
However, the annual value transferred was $6.8 trillion in Q1 2024, showing signs of growth, and the monthly value of stablecoins transferred across all chains increased from $630 million in September 2023 to 19% in March 2024. It more than tripled to $1 billion.
“Stablecoin value anchored on blockchain signals a strong adoption trend of digital dollars within the cryptocurrency trading ecosystem and cross-border payment currencies,” Chhugani and Sapra added. “While initial usage was driven within the global cryptocurrency ecosystem, there are signs of general adoption across payment players (Paypal, Visa) and consumer fintech platforms (Grab in Singapore, MELI in Latin America).”
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