The anatomy of stablecoin transactions
Summary
Focus
Stablecoins have become a core component of blockchain-based financial systems. Beyond facilitating simple peer-to-peer payments, they have emerged as critical elements of complex financial transactions that encompass programmable operations enabled by smart contracts. The growing economic significance of stablecoins makes it essential to understand how they are used in practice. This paper investigates the economic role of stablecoins by distinguishing between individual transfer events and broader complex transactions in which individual transfers are embedded, shedding light on their implications for financial intermediation, market structure and financial stability.
Contribution
This paper formalises the distinction between stablecoin transfers, which record individual changes in stablecoin ownership as event logs, and transactions, which can bundle multiple transfers and other financial operations into a single, atomically executed sequence. By analysing over 593 million event logs from 141 million Ethereum transactions executed in 2025 for three major US dollar-denominated stablecoins – Tether (USDT), USD Coin (USDC) and PayPal USD (PYUSD) – the study develops transparent, vendor-independent metrics to measure transaction complexity. These metrics capture dimensions such as token co-usage, computational burden and timing, offering a reproducible framework for understanding how stablecoins function within smart contract-based financial systems. This approach mitigates biases in simple transfer-level analyses, which often misrepresent the scale and nature of stablecoin activity.
Findings
The analysis reveals that a substantial share of stablecoin activity involves complex financial operations rather than simple payments. At the transaction level, roughly one third of all stablecoin transactions generate multiple steps (or event logs) and exhibit computational complexity well beyond that of a simple payment. The degree of complexity varies across transactions, with some operations involving more than 1,000 steps. Because complex transactions each emit multiple transfer events, nearly 60% of all transfer events occur within them. When empirical analysis of stablecoins begins from transfer-level data, interpreting each transfer as a standalone payment misclassifies almost six in 10 transfer events, overstating both stablecoin transfer counts and transferred volumes. Additionally, the three stablecoins studied are not used interchangeably; each exhibits distinct patterns in transaction complexity, urgency, timing and integration with financial protocols, reflecting differences in institutional design and functional roles. These findings recast stablecoins as programmable financial tools embedded in smart contract infrastructure, with implications for empirical research, regulatory frameworks and the design of policies to enhance the safety and efficiency of blockchain-based financial systems.
Abstract
Stablecoin transfers are often interpreted as payments. On programmable blockchains, however, they are frequently embedded in atomically executed transaction bundles that combine trading, lending, arbitrage, liquidity provision, and settlement. We show that ignoring this structure materially distorts the interpretation of stablecoin activity. Using 593 million event logs from 141 million Ethereum transactions involving three major U.S. dollar stablecoins, we develop a replicable framework to measure transaction complexity from archive node data, public contract labels, and event signatures. The analysis combines measures of token and contract co-usage, action type, computational complexity, urgency, and timing. Two results emerge. First, complexity is a first-order feature of stablecoin activity: nearly 60 percent of transfer events occur within complex transactions. Second, the three stable coins are not used interchangeably: their use differs systematically across transaction structures, urgency, and timing, consistent with distinct institutional designs and economic functions. Analyses that treat transfers as standalone payments therefore risk misclassifying a large share of on-chain stablecoin use, with implications for empirical measurement, market monitoring, and policy.
JEL classification: E42, O33, G28, C81, G23
Keywords: blockchain, payments, policy and regulation, stablecoins, transaction complexity
