There has been fast growth in the stablecoin economy, with a recent total of $187 billion, which is quite near the $200 billion thresholds.
Stablecoins like Terra’s UST and Neutrino Protocol’s USDN are gaining popularity even as Tether remains the most widely used.
They experienced a nearly 30% and a 44% rise in issuance in the previous month, respectively. In other words, if this trend continues, it will easily surpass $200 billion in the following months.
Stablecoins Strong USD Backing
Compared to other digital currencies, stablecoins are designed to be precisely that: stable.
Some coins are tied to the US dollar, implying that each one is fully backed by a dollar’s worth of cash, Treasury securities, or other secure assets and may thus be redeemed at will.
A tenth of all digital assets, including cryptocurrencies, are represented by these tokens.
UST total market cap at $14.68 billion on the daily chart | Source: TradingView.com
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Tether At $80 Billion
The largest stablecoin by market value, Tether has had its supply rise by 2% in the previous month and now stands at over $80 billion.
The stablecoin market is dominated by USDT, with a 43.78% share. Furthermore, it is the third-largest cryptocurrency, behind Bitcoin and Ethereum, in terms of market valuation.
Following Tether, we have USDC or the USD coin, which has a market capitalization of $52.5 billion, making it a significant part of the total market.
Tether accounts for 28% of the stablecoin economy and is the fifth-largest cryptocurrency after Binance Coin (BNB), which is ranked fourth.
Investors have great expectations for Terra’s UST, one of the fastest-growing stablecoins, and the Luna and UST projects as well. Market capitalization is currently $14.7 billion, up nearly 30% in the previous month.
USDC frequently trades with Tether, accounting for 65% of Monday’s tether swaps. Tether is followed by BUSD, USD, EUR, and WETH as the top pairs trading with USDC.
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While USDT and USDC saw no significant increases in the last month, UST, FRAX, and USDN were up in their 30-day issuance rates.
Terra’s UST increased by nearly 30%, and the stablecoin now has a market capitalization of approximately $15 billion.
More Room For Growth
Last month, FRAX, the first fractional-algorithmic stablecoin protocol, saw its 30-day issuance rate increase by 9.5%, and Neutrino Protocol’s USDN climbed by 44%.
Stablecoins Facilitate Faster Trading
Meanwhile, Stablecoins Like UST and USDN is primarily used today to facilitate trading other, more volatile digital assets, such as Bitcoin.
However, companies around the world are working to develop stablecoins that businesses and households can use to conduct transactions, which could help make the payment system faster, more resilient, and more inclusive.
Featured image from Bitcoin News, chart from TradingView.com