Robinhood has introduced staking for Ethereum (ETH) and Solana (SOL) to its U.S. customers, enabling them to earn rewards by locking their crypto assets on the platform. The feature requires a minimal stake, making it accessible for a wide range of investors. This launch broadens Robinhood’s crypto services amid growing demand for passive income opportunities in decentralized finance. The move positions Robinhood to compete more aggressively in the expanding crypto market.
Stablecoins—cryptocurrencies pegged to stable assets like the USD—are drawing increasing attention from top payment companies. Recent reports claim stablecoin transaction volumes over the past year have surpassed Visa.
However, industry experts are skeptical of these numbers. This article explores the reasons behind that skepticism.
Why Experts Suspect Stablecoin Volume Might Be Inflated
Recently, Chamath Palihapitiya, CEO of Social Capital, posted on X that the weekly transaction volume of stablecoins has exceeded that of Visa, reaching over $400 billion. He added that companies like Visa, Mastercard, and Stripe are actively embracing the trend.
According to the data, in Q4 of 2024, the average weekly stablecoin transaction volume reached $464 billion. That’s significantly higher than Visa’s $319 billion. A Bitwise report estimates that stablecoins processed about $13.5 trillion in total transaction volume in 2024. This marks the first time stablecoin volume surpassed Visa’s annual total.
At first glance, this seems like a major milestone, suggesting that stablecoins could reshape the future of global payments. Citigroup even projects that the stablecoin market could reach $3.7 trillion by 2030.
Not everyone shares the enthusiasm. Some experts have warned that the reported stablecoin volume might be inflated. They argue it doesn’t reflect real economic activity and shouldn’t be directly compared with traditional systems like Visa.
Joe, an advisor at Maven 11 Capital, pointed out that professional traders can generate hundreds of millions in volume using very little initial capital.
“If you have $100,000 of USDC on Solana, you can do ~$136 million of ‘stablecoin volume’ for $1 in fees,” Joe said.
He used Solana as an example. Solana is a fast blockchain with extremely low transaction fees—about $0.0036 per transaction. Joe even joked that with $3,400, someone could double weekly stablecoin transaction volumes. He implied that the metric is easy to manipulate and not truly reliable.
Dan Smith, a data expert at Blockworks Research, strongly supported Joe’s view. Dan explained that using flash loans—uncollateralized loans in DeFi—can inflate volume even further at lower costs.
Flash loans allow users to borrow large sums without collateral, as long as they repay within the same transaction. This enables volume manipulation without requiring significant capital, further casting doubt on the numbers cited by Palihapitiya.
Rajiv, a member of Framework Ventures, was even more direct. He called stablecoin volume a “useless metric.” Dan Smith agreed. He added that the unusually high volume often signals exploitative behavior within the system.
Wash Trading and Bot Trading Undermine Economic Value
One key reason experts doubt stablecoin volume is the presence of wash trading and bot trading.
Wash trading involves repeatedly buying and selling between wallets controlled by the same person or entity. The goal is to artificially inflate transaction volume. Bot trading uses automated programs to conduct trades, often for arbitrage or fake liquidity.
A $1 million stablecoin transaction might just be money transferred between two wallets owned by the same person. It adds no real economic value. This contrasts sharply with Visa, where each transaction typically represents a real purchase or payment, like buying goods or services.
Last year, Visa’s dashboard also reported that only 10% of stablecoin transactions were genuine. A wash trading report by Chainalysis found that wash trades involving ERC-20 and BEP-20 tokens could total up to $2.57 billion in volume in 2024.
The ongoing Ripple vs. SEC lawsuit may conclude without any changes to the $125 million judgment against Ripple, according to attorney Fred Rispoli.
The legal expert suggested that the Securities and Exchange Commission (SEC) might be waiting for new leadership before making a final decision. This has led to discussions about whether Ripple could negotiate a reduced penalty or alternative settlement.
Ripple vs. SEC Lawsuit Could End with $125M Judgment
The US SEC, currently led by a 2-1 pro-crypto commission under acting Chair Mark Uyeda, has not dropped its case against Ripple, despite withdrawing other cryptocurrency-related lawsuits. Legal analysts Fred Rispoli in an X post believes the agency is waiting for new SEC Chair candidate Paul Atkins to take office before making further decisions on the case.
Fred Rispoli has argued that dropping the appeal while keeping the $125 million fine would save the SEC from further legal battles.
“The best satisfaction of this, if true, is that it nullifies the thousands of hours of work put in by SEC staff to get the $125M judgment,” Rispoli stated in a post on X.
The Ripple vs. SEC lawsuit remains one of the most complex legal battles in the cryptocurrency industry. While the SEC recently closed cases against Kraken, Coinbase, and ConsenSys, it has yet to take similar action against Ripple. Some legal experts believe the injunction on Ripple’s institutional sales of XRP may be a key factor in the delay.
Speculation Over XRP Payments and Strategic Reserves
There has been speculation that Ripple could settle the $125 million fine by transferring XRP instead of cash. Vincent Van Code, a market analyst, suggested that Ripple might be negotiating to pay the fine in XRP, which could then be allocated to a government-controlled cryptocurrency reserve.
According to Van Code, “Some are speculating that Ripple, rather than pay $125 million in dollars, provides the equivalent in XRP to the new crypto strategic reserve.” However, attorney Rispoli doubts that such an arrangement is likely, given the slow progress in legal proceedings.
Meanwhile, Ripple’s escrow holdings, which contain approximately 37.1 billion XRP, have been at the center of discussions regarding potential government acquisitions. Over the weekend, U.S. President Donald Trump confirmed that XRP would be part of the country’s digital asset reserve, fueling speculation that Ripple’s escrow could be involved in the legal negotiations.
XRP Sales Restrictions Remain a Key Issue
The Ripple vs. SEC lawsuit has focused on whether XRP should be classified as a security. In 2023, Judge Analisa Torres ruled that Ripple’s institutional sales of XRP were securities transactions, leading to the $125 million fine. Ripple has since been working to challenge the injunction that restricts certain sales of XRP to banks and payment processors.
According to legal experts, Ripple’s efforts to overturn the injunction could be a reason why the SEC has not yet dropped its case. Attorney Jeremy Hogan has suggested that Ripple may be engaging with the Second Circuit Court of Appeals to contest the ruling.
Meanwhile, Ripple Chief Technology Officer (CTO) David Schwartz has dismissed concerns about XRP inflation. Schwartz reaffirmed that XRP’s total supply cannot be increased under the XRP Ledger’s code.
“There is literally no function to create any more XRP. The code to do such a thing does not exist,” he stated.
As for the Ripple vs. SEC lawsuit, it is currently under review at the Second Circuit Court of Appeals. The SEC submitted its arguments to the court on January 15, 2025, and Ripple has until April 16 to file its response.
Cryptocurrency exchange Coinbase has filed an amicus brief with the United States Supreme Court. The brief is based on a case challenging the Internal Revenue Service’s authority to collect customer data from cryptocurrency platforms without a warrant. Coinbase Chief Legal Officer Paul Grewal announced the filing on X. He also urged the court to “right the wrong” of the third-party doctrine.
Coinbase pushed back IRS’s request of 500k user data
In its amicus brief filed Wednesday, Coinbase argues that the IRS action “invaded a sphere in which over 14,000 Americans had a reasonable expectation of privacy against a warrantless IRS trawl for extensive personal and financial information.” In addition, the top cryptocurrency exchange notes that the government’s position could effectively eliminate privacy protections for blockchain users.
The Supreme Court case stems from a confrontation that began in 2017 when the IRS issued what’s known as a “John Doe summons” to Coinbase. They sought financial data for more than 500,000 customers. Additionally, the Trump administration made this request as part of the tax agency’s efforts to ensure cryptocurrency users were properly reporting and paying taxes on their transactions.
Coinbase also actively contested the IRS’s request, which Grewal described as a “fishing expedition.” Through court battles, the exchange managed to substantially narrow the scope of the data it was ultimately compelled to provide to the IRS.
The third-party doctrine says that any time you voluntarily share info with a third party you have no reasonable expectation of privacy whatsoever. Today @coinbase filed an amicus brief with the US Supreme Court to right this wrong. 1/3
James Harper, a Bitcoin researcher, lawyer, and fellow at the American Enterprise Institute, started the current Supreme Court case. In 2020, Harper filed a lawsuit against the IRS and challenged the agency’s authority to demand his financial records without a warrant. His case has now made its way to the nation’s highest court.
The exchange challenges the third-party doctrine’s application to crypto
The key point of Coinbase’s legal argument is a fundamental challenge to the “third-party doctrine,” a legal principle that the Department of Justice has cited in defending the IRS actions. Under this doctrine, “a person lacks a reasonable expectation of privacy in information voluntarily provided to a third party, including bank records pertaining to him,” according to the DOJ’s position.
Coinbase’s Grewal explained the exchange’s opposition to this principle in a tweet thread announcing the brief filing. The third-party doctrine says that if you knowingly provide information to a third party, you can’t reasonably expect privacy. Grewal responds that this is too general an opinion and does not acknowledge the new digital age.
The exchange’s letter calls on the Supreme Court to act to make clear that the third-party doctrine does not permit the IRS to perform dragnet searches. Importantly, Coinbase makes clear that its stance goes far beyond cryptocurrency. In addition, as it asserts its dedication to tax compliance, Coinbase demands government requests that are “narrow and tailored” and are not blanket exercises in data collection.
The move by Coinbase comes amidst other notable activities in the crypto space. A US court recently vacated its decision against Tornado Cash. Grewal also congratulated Tornado Cash’s achievement and appreciated the court’s consideration after this win.
