Fun

USDC overtakes USDT: Compliance is key to stablecoin dominance

News Feed - 2024-05-03 10:05:00

Daniel Ramirez-Escudero11 hours agoUSDC overtakes USDT: Compliance is key to stablecoin dominanceTether’s USDT hegemony in the stablecoin market may shift as institutional investors chip into the crypto market.4765 Total views6 Total sharesListen to article 0:00Follow upOwn this piece of crypto historyCollect this article as NFTJoin us on social networksTether has long dominated the stablecoin sector thanks in large part to USDT’s status as the first fiat-backed stablecoin.


However, new serious competitors have entered the stablecoin market over the past several years, giving USDT (USDT) a run for its money.


Since 2024, the transaction volume of Circle’s stablecoin, USD Coin (USDC), has been on the rise.


According to payments giant Visa, USDC’s monthly transactionsflipped USDT for the first time in December 2023.


In March 2024, USDC’s transaction volume began to rise steadily, maintaining its dominance while USDT lost transaction volume. On March 24, 2024, USDC closed the week with almost five times morevolume than USDT.


On April 21, 2024, USDT’s weekly transaction volume downtrend continued, shrinking to $89 billion while USDC increased to $455 billion.


While USDC launched in 2018, it has already reached 20% of the total stablecoin market. 


The battle for stablecoin leadership is clearly between USDT and USDC, as together they cover 90% of the total stablecoin market, according to a January 2024 report from crypto exchange OKX.


According to on-chain data, USDC is absorbing crypto’s institutional adoption. This may threaten USDT’s hegemony, as institutional investors are expected to drive the bull market.Stablecoins race to attract institutional investors


The crypto market has evolved greatly over the years, from a market flooded by fraudulent projects in the initial coin offering (ICO) era to a market that is set to onboard major institutional investors following the approval of spot Bitcoin exchange-traded funds earlier this year.


The crypto market has matured and may have stepped into a “new phase” where “compliance is super important,” as former Binane CEO Changpeng Zhao posted on X on May 2.


Recent: Bitcoin L2s set to explode as Runes congest BTC network


This focus on compliance is opening up competition between companies that wish to attract the new wave of investors entering the crypto market — i.e., stablecoins that are compliant will come out on top.


In this regard, USDT — which has previously been the target of reports casting doubt on the fidelity of its reserves — faces a challenge.


Ruslan Lienkha, chief of markets at fintech firm and crypto exchange YouHodler, told Cointelegraph:“USDT is an offshore stablecoin with a lack of transparency and regulation, while USDC is closely watched by U.S. authorities.”


Tether is based in the British Virgin Islands, which is considered a tax haven for off-shore banking. In contrast, USDC issuer Circle is under U.S. jurisdiction, as it’s based in Boston, Massachusetts.


USDC’s strategy of branding itself as a fully regulated, transparent stablecoin may be pushing Tether to try to clean up its public image. On April 1, it completed a “gold standard” independent audit from the ​​American Institute of Certified Accountants.


Upcoming regulation frameworks in the United States and Europe may be factors that attract regulatory-compliant users to use USDC over USDT.


On April 17, the Lummis-Gillibrand Payment Stablecoin Act was introduced in the United States Congress. If it becomes law, it will affect all stablecoins in the U.S. market.


If Tether wishes to get a stamp of approval from U.S. authorities, it will need to change its off-shore establishment to avoid missing out on one of the biggest markets in the world.


In the European Union market, the upcoming Markets in Crypto-Assets regulatory framework will require stablecoin issuers to register as e-money issuers starting June 30.


In anticipation of the regulations coming into full effect later this year, Circle has placed EURC — the sister version of USDC, pegged to the euro — in an advantageous position.


Recent: Binance ties SAFU fund to USDC: Is the fund missing out on potential gains?


On March 21, 2023, Circle applied for a Digital Asset Service Provider license from the French regulatory authorities.


The permissions would grant Circle to become a registered digital asset service provider, which would “enable Circle to on-shore its flagship product for the European market” and “begin the process to become MiCA conforming e-money token under the new regime,” according to a press release. Tether still hasn’t applied to become an e-money issuer in the EU.


USDC’s consolidation in transaction volume may be a cue that Tether should not ignore. If it becomes the norm, Tether may have already lost its crown as the king of stablecoins.# Business# Circle# Adoption# Tether# Stablecoin# USD CoinAdd reaction

News Feed

Russians Offered Ready-made Crypto Exchange Accounts Amid Restrictions
Russians Offered Ready-made Crypto Exchange Accounts Amid Restrictions Russian crypto traders have been looking to obtain unrestricted accounts for global exchanges as their access
Amaka Nwaokocha13 hours agoFerrari to accept crypto payments in the USFerrari’s decision to accept cryptocurrency payments was driven by market demand and dealer requests, with numerous clients investing in digital cur
72% of Investors Will Hold Bitcoin Even if Price Falls to $0
72% of Investors Will Hold Bitcoin Even if Price Falls to $0A new poll finds that 72% of bitcoin investors are bullish about the cryptocurrency and will hold onto it even if the pri
J.W. Verret7 hours agoBinance’s DOJ settlement offers a glimmer of hope for the crypto industryChangpeng Zhao is out at Binance, but his company lives on. That suggests tacit affirmation from the Biden administration o
Crypto Exchange Binance Ceases Trading in Singapore Dollars to Comply With Regulations
Crypto Exchange Binance Ceases Trading in Singapore Dollars to Comply With Regulations Cryptocurrency exchange Binance has announced that it will cease offering trading pairs and p
Tezos Foundation Launches Fund to Collect NFT Creations by African and Asian Artists
Tezos Foundation Launches Fund to Collect NFT Creations by African and Asian Artists The Tezos Foundation recently said it has committed $1.23 million to a fund that will be used t
Bitcoin Recovery Fueled By Almost $19 Billion In Crypto Inflows, Data Shows
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Technical Analysis: Flow Climbs Close to 30% to Enter Top 50
Technical Analysis: Flow Climbs Close to 30% to Enter Top 50 Flow is trading almost 30% higher on Saturday, as the majority of the crypto top 100 are in the green. Today’s m
IRS Agent Poses as Bitcoin Trader Called ‘Mr. Coins,’ Biden’s IRS Wants ‘Outflow and Inflow’ Data From Banks
IRS Agent Poses as Bitcoin Trader Called "Mr. Coins," Biden"s IRS Wants "Outflow and Inflow" Data From Banks Over the last few weeks, Americans have read about the U.S. Internal Re
London-Based Cryptocurrency Exchange LBX Faces Compulsory Liquidation
London-Based Cryptocurrency Exchange LBX Faces Compulsory Liquidation London-based cryptocurrency exchange LBX is the latest digital asset trading venue to face critical difficul
William Suberg13 hours agoBitcoin can still hit $19K, warns trader ahead of BTC price ‘big move’BTC price should see a serious shake-up in the coming days, but Bitcoin market participants are increasingly worried it
Skybridge Capital Cofounder Says Gamestop Activity Is ‘More Proof That Bitcoin Will Work’
Skybridge Capital Cofounder Says Gamestop Activity Is "More Proof That Bitcoin Will Work" The New York-based Skybridge Capital cofounder, Anthony Scaramucci, rec