USDT Growth on Ethereum Defies Expectations, Study Finds
A recent study by the Bank for International Settlements (BIS) has shed light on the growth of USDT issuance on Ethereum without a corresponding increase in balances held in smart contract accounts. According to the research, between 2021 and 2024, the share of USDT held in smart contracts on Ethereum remained relatively stable, fluctuating between 15% and 20%. In contrast, the balance of USDT in non-contract accounts grew significantly during this period.
The study's findings contradict the assumption that an increase in stablecoin supply necessarily means more capital entering DeFi. The researchers used records of USDT transfer events on Ethereum and Tron to reconstruct token balances and identify contract accounts through contract deployments.
The BIS research highlights that token balance and economic use are not the same thing, as a contract account can hold USDT for various purposes such as bridging or wrapping, while an external account can be used for payments, savings, or exchange custody.