For the first time in USDC’s history, the stablecoin posted more transactions on the Ethereum network than USDT on June 20.
USDC versus USDT
According to records, more people were willing to transact using the audited and sufficiently backed USDC stablecoin issued by Center. The issuer is a consortium by Circle—a financial firm whose investors include Coinbase, the cryptocurrency exchange, and Bitmain, the chipset manufacturer behind the Antminer brand.
The spike in USDC transactions is due to several factors. However, it is primarily because Tether Holding Limited, the issuer of USDT, has failed to release an audited report on its coin’s reserves.
At spot rates, USDT is one of the most liquid, with a market cap of over $67.4 billion. Meanwhile, USDC has a market cap of $55.7 billion and is rapidly narrowing the gap as doubts emerge over the stability of the USDT stablecoin.
Investors are Concerned about USDT’s Transparency
Over the past few weeks, specifically following the collapse of the UST algorithmic stablecoin, rumors about USDT’s “insufficient” reserves, transparency concerns, and a brief de-peg that led to market jitters have forced many users to reconsider their position, with most liquidating for USDC. During this bear market—characterized by extreme fear and doubt, USDC’s market cap has been one of the fastest-growing, gnawing significant market share from USDT.
Analysts project USDC’s market cap to continue rising in the months ahead, citing USDC’s stability, proven audit reports, and holder stability. Besides regular audit reports on their reserves, USDC has been launching on more blockchains, with the latest being Polygon, recently announcing plans for the Euro Coin that will use the exact blueprint as the USDC.
When announcing the release of the Euro Coin, Circle said each coin in circulation will be backed by euro “held in euro-denominated banking accounts so that it’s always redeemable 1:1 for euros.”
Rising Role of Stablecoins
Stablecoins continue to play a big role in crypto. Tracking top fiat currencies like the USD and Euro allows traders to quickly transit to crypto or revert to fiat stability during periods of high volatility.
For their crucial role, stablecoin’s market share has been steadily rising, representing over 15 percent of the total crypto value.
- ethereum feature image blockmagnates (1): Photo by Nenad Novaković on Unsplash