Stablecoins have exploded in trading volume this year. The largest stablecoin Tether (USDT) consistently boasts a higher trading volume than Bitcoin. BTC is still king in the cryptocurrency market, but it is slowly losing its dominance among trading pairs thanks to stablecoin competition.
One competitor to Tether, however, is making inroads and recently hit a milestone. Coinbase’s own USDC recently hit its $1B in issuance and is currently the world’s second-largest stablecoin. The dollar-backed token was created by both Coinbase and Circle, one of the largest blockchain startups in the U.S. The stablecoin is, as of today, one year old.
USDC’s rise is largely due to two factors. Firstly, there is a serious need for alternatives to Tether (USDT). Tether has been embroiled in controversy for years now and it is facing serious charges from the New York Attorney General. Tether, effectively, is not backed by the amounts of USD that they claim and its co-founder even admitted as much in a recent interview. So, it’s no surprise that USDC is gaining ground given the controversies surrounding USDT.
Secondly, USDC is backed by Coinbase and Circle. These are two of the most well-known, and respected, firms in the cryptocurrency world with long-standing ties to the rest of the industry. This fact inevitably made it stand out among the rest since consumers ‘trust’ USDC more.
Still, however, USDC has a lot of catching up to do if it wants to compete with the likes of Tether. USDC currently has a trading volume of just $201M at the time of writing. Tether (USDT), in comparison, has a trading volume of $23B. These numbers alone demonstrate that Tether is miles ahead of any other stablecoin and, despite its controversies, isn’t losing its top-spot anytime soon.
Can USDC someday eclipse Tether by trading volume? Let us know your thoughts below in the comments.