USDC Leaves Tether Behind In Terms Of Market Cap And Becomes First On Ethereum
January 25 2022 - 8:20AM
NEWSBTC
There are have always been tussles recently between the top two
most popular stablecoins, USD Coin (USDC) and Tether (USDT). But
recently, USDC is creating a notable milestone as it out-runs
Tether on the Ethereum network in terms of the total supply. Since
2016, Tether seems to be the top stablecoin, ranking the most
popular. This is after its market sharing with BitUSD and NuBits
(USNBT). From its launch in 2014, Tether operated on Omni. However,
it later emerged in the limelight as BitUSD and NuBits lost their
shedding users and dollar peg, which threw them into obscurity.
Related Reading | Why The Ethereum Foundation Launched A
Client Incentive Program In 2018, USDC came into view as a solid
competitor for Tether. While Tether seems to be under a cover due
to some uncertainties with its backing, USDC appears with more
transparency and adequate regulation. The current supply of USDC
and USDT on Ethereum is 40.6 billion and 39.82 billion,
respectively. This now puts USD Coin ahead of Tether on the
network. However, Tether still stands as the most notable
stablecoin having a total supply of 78.5 billion tokens. In
addition, the asset has about 38.7 million tokens on the Tron
network representing almost half of its total supply. Also, Tether
tokens are available on Solana, BSC, Polygon, Huobi ECO Chain,
Avalanche, and other 13 Chains, as well as L2 solutions.
Contributory Factors To Tether (USDT) Decline Over the years, the
gradual decline of Tether’s public images is attributed to lots of
doubts surrounding its backing. Eyebrows have been raised on both
the collateralization of the stablecoin and the management strategy
of its reserved funds. In its move to clear the numerous doubts,
double Consolidated Reserves were issued. These reports came from
Moore Caymon, an accounting firm, in 2021 concerning the financial
reserves of Tether. The latest financial report of the stablecoin
disclosed its $30.8 billion holdings in an unclear commercial
paper. This was in addition to other assets which are backing USDT.
On its part, USDC boasts of a total supply of 45.7 billion tokens
running across 21 different Chains and L2 solutions. In addition,
USDC has two key issuers; Circle and Coinbase, a digital payments
service. Moreover, Circle is backed by China Everbright Bank,
Bitmain, and eight other companies. The Circle depicts high
transparency on its reserves; it is still below the expectation of
some critics. Following an announcement in August 2021 from Emile
Choi, the President of Coinbase, there was a complete shift to cash
and US Treasury bonds in the USDC reserves backing. Related Reading
| Ethereum Foundation Devs Discuss ETH2 Launch & Economics
A report from an Independent Accountant by Grant Thornton showed
that the implementation of the shift took place on October 27,
2021. On their centralized stablecoins, the top three remain USDT,
USDC, and BUSD. However, there has been an increase in the
proliferation of decentralized stablecoin versions. Featured image
from Pixabay, chart from TradingView.com
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