Cryptocurrency NewsUSDT market share jumps amid economic uncertainty, USDC shrinks

USDT market share jumps amid economic uncertainty, USDC shrinks

According to CoinGecko data, Tether (USDT) has seen its market dominance increase, reaching 65.89% from 47.04% one year ago. Tether’s market capitalization has soared to $83.1 billion, while the market cap of USD Coin (USDC), issued by Circle, has dropped to $29 billion from its peak of $55 billion. Other stablecoins like Binance USD (BUSD) and Dai (DAI) have also experienced declines in their market share during this period.

Circle CEO Jeremy Allaire attributed the decline in USDC’s market capitalization to the regulatory crackdown on cryptocurrencies in the United States. The USDC stablecoin faced issues with its peg to the dollar in March due to the U.S. banking crisis, which resulted in reserves worth $3.3 billion being stuck at Silicon Valley Bank.

The passage also mentions the growing connection between the cryptocurrency space and traditional finance and the increasing popularity of stablecoins. The European Systemic Risk Board released a report emphasizing the need for transparency in the digital assets market, specifically regarding stablecoin reserves.

Tether, in particular, has faced criticism for its lack of transparency. The company, owned by iFinex based in Hong Kong, was fined $18.5 million in 2021 by the New York Attorney General’s Office for allegedly misrepresenting the fiat backing for its reserves. Tether has responded to these allegations on Twitter and has been taking steps to reduce its exposure to the banking system following the collapse of Silicon Valley Bank.

Both Tether and Circle have made adjustments to their reserves to mitigate risks amid global economic uncertainty. Tether has increased its holdings of U.S. Treasury bills to over $53 billion, accounting for 64% of its reserves. The company claims that 85% of USDT is now backed by cash, cash equivalents, and short-term deposits. Circle has also reportedly adjusted its reserves, no longer holding Treasuries maturing beyond early June.


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