Ki Young Ju, the founder and CEO of on-chain analytics platform CryptoQuant, has stated that financial institutions in the United States have a preference for Circle’s USD Coin (USDC) over Tether’s USDT. According to Ju, these firms are not entirely comfortable with USDT and would rather see global crypto users carry out their stablecoin transactions using USDC.
While Ju did not provide specific reasons for this preference, he did suggest a strategy for increasing the global use of the preferred stablecoin. He noted that USDT’s increasing dominance in reserve holdings on global exchanges is due to its use as collateral in derivatives. With a market cap exceeding $94.9 billion, USDT has achieved a 71.92% dominance in the stablecoin market. This is significantly ahead of USDC, which holds a 19.49% market share.
USDT currently holds a dominant position on the Ethereum and Tron networks. While Ethereum has a balanced mix of USDT and USDC, Tron is overwhelmingly dominated by USDT. This is demonstrated by USDT accounting for over 95% of all token contracts and 94% of the total value locked in stablecoins on the Tron network. In 2023, USDT added more than $24 billion to its market cap, while USDC lost a similar amount. This time last year, Tether’s market cap was around $66 billion, but by the end of 2023, it had risen to $91 billion.
It is important to note that the decline in USDC’s market cap became more pronounced after Circle announced its exposure to the U.S. banking crisis in March 2023. From a high of $55 billion in June 2022, the stablecoin’s market cap has dropped to around $25 billion. Ju suggested that the quickest way to increase the global use of USDC could be through the Coinbase International Exchange. This could attract more retail investors to its derivative products, which offer up to 5x leverage and are settled in USDC.
In line with this, Coinbase has recently announced a partnership with Yellow Card, the largest African stablecoin exchange. This partnership aims to give more users access to USDC.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Ki Young Ju |
| Companies | Yellow Card, Tether, CryptoQuant, Coinbase International Exchange, Circle |
| Currencies | Tether, united states dollar, US Dollar |
| Securities | None |
