January 10, 2024 at 16:05 GMTModified date: January 10, 2024 at 16:06 GMT
January 10, 2024 at 16:05 GMT

2023 enjoys record growth in crypto payments: report

CoinGate’s report highlights 2023 as a landmark year in crypto payments, with over 1.29M transactions processed.

2023 enjoys record growth in crypto payments: report

A report published by CoinGate revealed 2023 to be a milestone year for cryptocurrency payments.

The leading crypto payment gateway processed a record 1,294,058 payments last year, averaging one payment every 24 seconds.

This volume represented a 39.4% increase over the previous year, indicating a rapidly increasing pace of cryptocurrency adoption worldwide. In 2022, the figure stood at just 928,517 payments.

Additionally, the 2023 transactions accounted for nearly one-third of all CoinGate transactions in the past ten years. This highlighted a significant surge in recent crypto payment activity. The report also laid out some of the key drivers of this feat-

Impact of Binance Pay Wallet integration

The integration of Binance Pay into CoinGate’s payment service is said to have significantly contributed to the increase in crypto payments.

Since its introduction in March 2023, Binance Pay has accounted for a notable 8.2% of all crypto payments processed through CoinGate. 

Its usage started at 4.5% of monthly payments in March and steadily grew to 13% by December. This reflected growing consumer preference for this payment method.

Advancements in Lightning Network

Another key driver was the increased $BTC payment efficiency ensured by the Lightning Network, which is a layer-2 solution for Bitcoin that serves to speed up transaction times and decreases network congestion.

According to CoinGate’s statistics, 7.8% of all Bitcoin payments were facilitated through the Lightning Network. This marked a notable increase from the 4.5% in 2021 and 5.9% in 2022. 

The total number of payments executed through the Network also grew by 35.9% compared to the previous year, showing increased trust and usage of this technology.

Shifting trends in crypto payments

The landscape of cryptocurrencies used for payments also witnessed some intriguing shifts over the year.

While Bitcoin retained its position as a popular choice for crypto payments, its dominance saw a decrease. The top coin’s share in total payments processed through CoinGate dropped to 35.6% in 2023.

In contrast, stablecoins, particularly $USDT (Tether), emerged as an increasingly popular choice. The usage of $USDT for payments jumped to an average of 25.4% in 2023, a significant increase from the previous year. 

The stablecoin’s popularity went to an extent where, in the closing months of 2023, $USDT overtook $BTC as the dominant payment currency by surpassing in transaction volume.

The success story of 2023 was not limited to payment processors like CoinGate. Merchants who embraced cryptocurrency payments experienced remarkable gains as well. 

The report illustrated the example of leading marketplace Eldorado.gg, which reported that crypto payments contributed to 3% of their total sales. Similarly, IPRoyal, a proxy service provider, saw over 30% of their payments made in cryptocurrencies. 

Hostinger, which is a web hosting provider, also captured nearly a quarter of all crypto-paying customers, highlighting the effectiveness of these platforms in offering valuable solutions to their customers.

According to its Head of Payments, Mindaugas Barzdenis, Hostinger had been receiving requests from customers to allow alternative payment methods, especially from places where bank accounts or payment cards are not easily accessible.