Related: $400M Web3 investment fund ABCDE halts new investments, fundraisingStablecoin, low-value Bitcoin payments fueled by fiat inflation, high transfer costsBeyond speculative investment tools, stablecoins and Bitcoin are also used as a “transactional medium.”“Higher opportunity costs of fiat currency usage, such as high inflation, spur bilateral cross-border transactions in both unbacked cryptoassets and stablecoins,” the BIS stated, adding:“Likewise, greater economic activity within both sender and receiver countries is often linked to increased crypto flows in most cases.”High remittance fees charged by traditional financial institutions further bolster crypto adoption for international money transfers, especially from developed economies to emerging markets, the report stated.Global USDT flow map.
The BIS study, published May 8, found cross-border payments using the two largest cryptocurrencies, Bitcoin (BTC) and Ether (ETH), and the two largest stablecoins, USDT (USDT) and USDC (USDC), totaled approximately $600 billion during the second quarter of 2024, the final observation period covered by the analysis.“Our findings highlight speculative motives and global funding conditions as key drivers of native crypto asset flows,” the BIS stated.
Related: Spar supermarket in Switzerland starts accepting Bitcoin paymentsSpeculative crypto activity remains tied to “global conditions for funding in major crypto markets,” signaling a growing “interconnectedness” between cryptocurrencies and the legacy financial system, the researchers stated, adding:“Concurrently, we observe that tighter global funding conditions, known to curtail risk-taking in traditional asset classes, are associated with reduced flows.
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Author / Journalist: Cointelegraph by Zoltan Vardai
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