Over the past four weeks, Bitcoin (BTC) transactions with ArchBlock’s dollar-backed stablecoin TrueUSD (TUSD) have surged on Binance. This is because, on March 23, Binance launched a zero transaction fee for this pair and recharge for all other pairs. Bitcoin-Tether pair dominates Binance liquidity despite TUSD’s higher volume.
However, as Tether (USDT) is the largest dollar-backed stablecoin by market cap, it remains more liquid than TUSD trading, and large orders have less impact on the cryptocurrency price. In addition, it’s worth noting that some traders may prefer to sell USDT instead of TUSD during times of high volatility, as Tether has faced examination in the past regarding its backing. This could further contribute to USDT remaining the more liquid option on Binance despite the increase in TUSD trading volume over the past few weeks.
In a recent market update, Conor Ryder, a research analyst at Kaiko – a crypto data provider in Paris, stated that Binance’s market depth data indicates that BTC-USDT is still king from a liquidity standpoint, with market makers more comfortable with exposure to Tether over TUSD.
USDT Has Regained The Capitalization It Lost In The Past Year
Tether (USDT), the world’s most popular stablecoin, has regained all its capitalization lost due to the events in 2022. The collapse of the Terra/Luna ecosystem and the failure of the FTX exchange raised questions about the future of the market and USDT. In May 2022, its market cap fell nearly 20% from $83 billion to $65 billion. However, in the first quarter of 2023, Tether’s capitalization reached $81.4 billion, approaching an all-time high. Tether, the real boom of USDT that determined its dominance in the market, started in January 2021 and lasted until mid-2022, allowing the crypto to grow by around $80 billion. This year’s recovery confirms Tether’s strength.
Binance’s regulatory concerns and Gemini’s struggles have fueled demand for Tether, the most important dollar-pegged stablecoin. Starting with a 32 percent share of the total Ethereum stablecoin supply at the start of the year, USDT now holds almost 43 percent, gaining more than 10 percentage points. Tether supply on leading blockchains has increased from 32.3 billion to 35.3 billion during this time.
In February, Tether released a certification report claiming its assets exceeded its liabilities. It also reported a net profit of $700 million for the fourth quarter of 2022.
Circle And Tether (USDT) Commented On Us Stablecoin Regulation
Comments on the new regulations regarding dollar-collateralized stablecoins came from companies Circle and Tether (USDT).
Circle CEO Jeremy Allaire said in a statement on Twitter that the legal framework needs to be established to safely issue, back, and manage internet-based digital dollars. Allaire highlighted the importance of the US leadership explaining regulations and supporting entrepreneurship and innovation. However, Allaire also stated that the regulation has not yet been fully clarified, and some questions remain unanswered.
Tether, on the other hand, explained that they hope the regulations will provide clarity for large corporations, institutions, and fintech companies and benefit the digital token economy. However, the company stressed that regulations should not only address risks but also consider the goal of increasing access to the financial system. Tether argued that regulations should be open to innovation and benefits.
Shifting the focus, for those considering transactions involving stablecoins like USDT, it’s important to be aware of local regulations and reputable platforms. If you are looking to sell USDT in Dubai, ensure that you are well informed about the legal landscape and select trustworthy platforms to facilitate your transactions effectively.
Possible Additional Issues Arise in Stablecoin Market
First, financial institutions and companies need more regulatory clarity to use stable currencies smoothly. But new tools must remain available to citizens so that innovation is not killed off.
Although there is no clear objection to the currently debated bill, it may be better if companies operating in the stablecoin market are included in this formation process. This way, it may be easier to fix problems that may arise later.