The USDT-to-USDC market cap ratio fell to its lowest ever in July 2022.
One of the hindrances to mainstream cryptocurrency adoption is price volatility, as these assets are freely traded in the open market without central administrators tasked with maintaining price stability. The anticipation of potential losses and gains has hindered cryptocurrency’s use as a medium of exchange. Stablecoins, however, are cryptocurrencies designed to maintain a stable value over time, making them ideal for commercial transactions.
The introduction of stablecoins in the cryptocurrency market ushered in a new wave of liquidity, as exchanges were able to provide trading pairs with tokens representing traditional fiat currencies.
Stablecoin design takes many different forms, each with its own tradeoffs:
- Reserve-backed stablecoins: Cryptocurrencies pegged to the value of a fiat currency held in reserve by a company or consortium. E.g., Tether (USDT), USD Coin (USDC) and Paxos Standard (PAX).
- Collateralized stablecoins: Tokens backed by other cryptocurrencies that retain a one-to-one value with a fiat currency through over-collateralization to absorb potential volatility of the underlying assets. E.g., Dai and BitUSD.
- Algorithmic (seigniorage supply) stablecoins: Rather than using a reserve or collateralization to maintain a stable value, these stablecoins are facilitated through an automated expansion and contraction of the monetary supply, emulating the role of central banks in the fiat economy. E.g., Basis.
Argentina has been in a long-standing battle against rising inflation and a continued decline of the peso against the U.S. dollar.3832
The stablecoin issuer announced its intentions of removing all commercial paper from its reserves last month as it countered rumors, and it remains on schedule so far.2956
“Europe’s upcoming crypto-assets policy framework will be to crypto what GDPR was to privacy,” says Circle chief strategy officer Dante Disparte.5355
The USTC price rally does not mean it would reclaim its lost U.S. dollar peg in the future.15983
LUNA2 may have bottomed in June, but just who is buying this controversial token?10425
Thomas Moser hinted that regulations might take time, as they could wipe out decentralized ecosystems like DeFi.2362
Stablecoins like USDT and USDC would be doing just fine if properly regulated, while Bitcoin is a “Ponzi scheme” in any case, China’s BSN chair told Cointelegraph.5778
The latest A$DC transaction saw ANZ’s institutional partner Victor Smorgon use A$DC to purchase Australian Carbon Credit Units from blockchain-based carbon trading platform BetaCarbon.3831
A state-backed digital currency like the U.S. dollar doesn’t necessarily have to be a competitor to a decentralized cryptocurrency, one industry exec believes.3521
Tether expects to be part of industry innovation in the United Kingdom as the country is planning to adopt stablecoins as a means of payment.4680
On the Ethereum network, USDC’s real volume has nearly doubled that of USDT in the past 24 hours, which could be another sign that the top stablecoin’s dominance is coming to an end.5579
Despite the FUD around stablecoins, the percentage of stablecoins in the total market cap has been growing recently, hitting new all-time highs.5157
Terraform Labs employees have reportedly been prohibited from exiting South Korea as investigations by prosecutors continue.4711
Citing an insider scoop, Autism Capital claimed that Abracadabra accrued $12 million in bad debt as a direct result of Terra’s sudden downfall, which has been refuted by founder Daniele Sestagalli.17650