The share of USD Coin (USDC) has decreased from 34.9% to 23.1% over the past year, while Tether (USDT) has increased from 47% to 65.9% over the same period. Such data is provided by CoinGecko.
The market capitalization of the first fell to $29 billion, the second increased to $83.1 billion.
The market share of Binance USD (BUSD) decreased from 11.68% to 4.18%, while Dai (DAI) stood at 3.66% from 4.05% in May 2022.
In April 2023, Jeremy Allaire, CEO of USD Coin (USDC) issuing company Circle, named enforcement actions against crypto firms are the main factor in reducing the capitalization of the stablecoin.
In addition to tough regulatory measures, the banking crisis affected – Circle’s share in the collapsed SVB accounted for about 8% ($ 3.3 billion) of the total cash reserves underlying the value of USDC.
On March 11, amid the collapse of the institution, the stablecoin temporarily lost its peg to the US dollar. Due to the USDC depeg, algorithmic stablecoins, including DAI, have also deviated from parity with the dollar. Later, Circle assured of solving problems with the banking support of the asset.
Another factor in the growth of the popularity of the coin from Tether could be the regulatory problems of BUSD.
In February 2023, the New York State Department of Financial Services launched an investigation into the exchange’s BUSD issuing partner, Paxos. The organization announced the stoppage of the issuance of the stablecoin and the termination of cooperation with Binance.
Recall that in the first quarter, the USDT issuing firm earned $ 1.48 billion in net profit – twice as much as in the previous period.
Earlier, amid uncertainty around raising the US government debt limit, Circle and Tether Limited revised the structure of reserves in favor of REPO and shorter T bill.
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