USDC Overtakes USDT in Circulation

For the first time ever, USDC now has more stablecoins circulating on Ethereum than Tether (USDT).

USDT has been the king of stablecoins for as long as many can remember but

there are currently 40 billion USDC tokens and 39.8 billion USDT tokens circulating in the crypto markets.

USDC has not been around as long as Tether but minted an incredible number of tokens in 2021.

Many speculated the rise in USDC came from growing fears over Tether and its financial backing.

Tether claimed every token on the market was backed one-to-one with USD but as it surpassed four billion tokens, many asked for proof of this claim.

In 2021 there were multiple lawsuits against Tether including a $42m fine from the US government over the lack of transparency regarding the fiat backing.

Both Tether and USDC no longer claim their stablecoin is backed by US dollars and instead state: “Each stablecoin is backed by one dollar or asset with equivalent fair value.”

The incredible amount of stablecoins in the cryptocurrency markets has garnered the attention of many governments around the world.

The growing number of USDC and Tether available in the market give concern to governments as they do not control the minting of these tokens and worry about the effect it will have on fiat economies.

While there are many other stablecoins on the market, Tether and USDC account for almost three quarters of the total stablecoins in existence and close to 8% of the total market capitalization of cryptocurrency.

Tether currently avoids transparency by keeping many of their assets in various countries around the world.

This has led to speculation that such assets do not fully exist, and that Tether could collapse if market volatility becomes extreme.

USDC on the other hand, claims that all of its backing assets are being held in US financial institutions.

This will likely make them a target of US regulators to ensure that the assets backing the 40 billion USDC tokens exist and could handle market volatility.

Many crypto enthusiasts believe that stablecoins are necessary for global adoption of blockchain and cryptocurrencies.

These beliefs come from the idea that major institutions would not accept tokens for products and services which have volatile value.

Unfortunately, the largest stablecoins on the market are very much centralized and can act on their own accord. A new solution will be necessary to make governments and crypto enthusiasts happy.

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Written by Tudor

Works as a developer and helps keeps the digital cogs turning. Leave them alone, they're busy.

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