In the world of stablecoins, Tether is gaining even more control as other coins struggle to keep up.
The world of stablecoins is currently facing some seismic shifts, with Tether leading the way in tightening its grip on the market. This comes after the New York-based Paxos Trust Company, which mints Binance’s stablecoin, announced that it would cease issuing new BUSD tokens due to regulatory issues.
Stablecoins are digital currencies that are pegged to a stable asset, such as the US dollar or gold, in order to maintain a stable value. They are becoming increasingly popular as a way to facilitate transactions and store value in the cryptocurrency space.
Tether, which is the largest stablecoin by market capitalization, has been facing regulatory scrutiny over the past few years. However, the company has continued to dominate the market, with its USDT stablecoin accounting for over 80% of all stablecoin trading volume.
The recent move by Paxos Trust Company to cease issuing new BUSD tokens is likely to have a significant impact on the stablecoin market. Binance is one of the largest cryptocurrency exchanges in the world, and the BUSD stablecoin is used as a means of trading on the platform. The decision to stop issuing new tokens comes after US regulators labeled the asset an unregistered security.
This move could lead to increased demand for other stablecoins, particularly Tether’s USDT, which has been able to weather regulatory challenges so far. However, it also highlights the need for greater regulatory clarity in the stablecoin market.
The cryptocurrency industry has been calling for clear and consistent regulations for some time now. The lack of regulatory clarity has been a major barrier to the mainstream adoption of cryptocurrencies and has led to a great deal of uncertainty for investors and businesses.
Tether’s dominance in the stablecoin market has been a cause for concern for many in the cryptocurrency space. Some have raised questions about the company’s ability to maintain its peg to the US dollar and its overall financial stability.
However, Tether has continued to grow in popularity and market dominance. The company has recently announced plans to launch a new stablecoin pegged to the Chinese yuan, further expanding its reach in the global cryptocurrency market.
“There’s way too much demand for dollar-based stablecoins for them to go away,” said Alex Miller, CEO at bitcoin developer network Hiro.
Instead rivals are vying to cash in on the woes of BUSD, the world’s third-biggest stablecoin, whose market value has shrunk to $12.9 billion from $16.1 billion, with its market share narrowing to 9.4 per cent from 12.1 per cent, according to CoinGecko.com.
Market leader tether (USDT) has been a big beneficiary, adding $1.9 billion to its market capitalisation to hit $70.3 billion since the news. It now commands 52.6 per cent of the stablecoin market, up from just over 51per cent.
Circle’s USD Coin, the second-biggest stablecoin, edged up over $700 million to $42 billion, lifting its market share to 31.3 per cent from 30.9 per cent. And the winner is Tether.
The stablecoin market is facing significant challenges as regulatory scrutiny increases. Tether’s dominance in the market is being further strengthened by the issues facing other stablecoins, such as BUSD. However, the need for greater regulatory clarity in the cryptocurrency space remains a pressing concern. As the market continues to evolve, it will be important for regulators and industry players to work together to establish clear guidelines and ensure the stability and growth of the stablecoin market.
