Circle’s USD Coin is silently closing the gap to Tether

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Teth­er’s dom­i­nance as the largest sta­ble­coin in the cryp­to space is qui­et­ly being erod­ed by the growth of Cir­cle’s USD Coin (USDC), which now con­trols around 30% of the sta­ble­coin market.

Accord­ing to avail­able data, USDC now has 50 bil­lion units in cir­cu­la­tion, cement­ing it as the sec­ond-largest sta­ble­coin by mar­ket cap.

USDC hits $50 billion in circulation

Per Jere­my Allaire, the co-founder and CEO of the sta­ble­coin issuer, what makes the cur­rent growth more com­mend­able is the fact that the USDC ecosys­tem is thriv­ing and “win­ning the dig­i­tal cur­ren­cy space race.”

A look at the fig­ures released by Allaire would show that USDC had over 4 mil­lion active address­es in 2021 and at the same time, the sta­ble­coin was involved in near­ly $2.5 tril­lion worth of trans­ac­tions in the same year.

All of this, cumu­la­tive­ly played a role in its “10,000% growth over the past two years.”

A look at data from Ether­scan would show that USDC’s cur­rent sup­ply on Ethereum is beat­ing that of USDT. As of press time, USDC has over 44 bil­lion tokens in cir­cu­la­tion while that of USDT stands at around 39 bil­lion tokens.

Aside from flip­ping USDT sup­ply on Ethereum, USDC is also steadi­ly gain­ing ground on its rival in the total Sta­ble­coin sup­ply stand. Present­ly, there is $177 bil­lion worth of sta­ble­coins in cir­cu­la­tion; of this, Teth­er con­trols 47% of the mar­ket while USDC con­trols 29%.

As of last year, Teth­er had near-total dom­i­na­tion of the space as it con­trolled 74% of the mar­ket while that of Cir­cle was just around 16%. 

Data from Coingecko would also show that while USDC grew by 987% in 2021, USDT only record­ed a growth of around 280%. 

Why Tether could be losing its market share

There is no deny­ing the fact that despite USDC’s impres­sive growth in recent times, Tether’s USDT remains the dom­i­nant sta­ble­coin in the cryp­to market. 

This can be seen in the trad­ing vol­ume of both assets with­in the last 24 hours where USDT record­ed around $37 bil­lion trades while that of USDC was just around $2 billion.

How­ev­er, like we point­ed out ear­li­er, Tether’s dom­i­nance in the mar­ket is being erod­ed large­ly thanks to its reg­u­la­to­ry issues that forced reg­u­la­tors to slam it with a $41 bil­lion fine last year. 

Accord­ing to the details pro­vid­ed, Teth­er made mis­lead­ing state­ments about its reserve to customers.

The firm declared that it had $1 in reserve to back every token but the reg­u­la­tors revealed that between June and Sep­tem­ber 2017, the cryp­to firm only had around $60 mil­lion in its reserve while there were over 400 mil­lion coins in circulation.

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