- The ERC20 USDC has grown by 1800 percent so far in 2021, capturing the USDT market share.
- Tether CTO says the growing competition is healthy for the stablecoin industry.
Bitfinex-backed Tether, the largest stablecoin issuer in the market, hasn’t minted a single USDT on the Ethereum blockchain since May 2021. There are currently over 62 billion USDT coins on the market, making it the third largest cryptocurrency.
Tether has set a historic record by not minting a USDT on the Ethereum blockchain in the past 50 days. The total value of the ERC20 USDT minted on the Ethereum blockchain is $ 28.9 billion. One reason for stopping USDT mining on Ethereum is the high gas fee on the network in May. However, the gas fee has dropped significantly recently.
Due to the high gas fee, Ethereum lost its stronghold as the dominant blockchain to host USDT. In April 2021, Tron outperformed Ethereum in terms of hosting the highest number of USDT coins. To date, Tron is home to more than 50 percent of the USDT in circulation with a total of 31.9 billion USDT minted on the blockchain.
Competitors eat up Tether’s market share
Several other USD-linked stablecoins have been gaining traction recently. Although Tether is the dominant player, Tether has slowly faced the heat of the competition.
Circle’s USD Coin (USDC) has been gaining traction since early 2021. A Messari report released last month showed that USDC has massive demand from Defi users. So far, USDC has seen an outstanding 1,800 percent growth in the first six months of 2021. The total circulation of USDC coins has increased from 1.3 billion to 25.7 billion.
In the coming weeks, it is very likely that USDT’s share of the stablecoin supply on Ethereum will drop below 50% for the first time.
USDC is quickly becoming the dominant stablecoin on Ethereum, in large part due to its growing role in DeFi.
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– Ryan Watkins (@RyanWatkins_) June 29, 2021
This shows that USDC is significantly closing the gap with the number of USDT minted on the Ethereum blockchain. The gap between the two players is now only 3 billion. Analysts believe the Ethereum-minted ERC20 USDC will soon overtake the USDT supply. This will happen if Tether’s share of the stablecoin offering on Ethereum drops below 50 percent.
Tether CTO welcomes market competition
While many competitors are eating up USDT’s market share, Tether’s Chief Technology Officer (CTO) Paolo Ardoino is not at all bothered by the development. Ardoino called it a healthy development! When asked if competitors are taking over Tether’s market cap, Ardoino said:
Everyone takes from the king, not from the smallest. Duh … (but clickbaiting is more important). Competition and diversification are the keys to success in any industry.
He added that Tether prides itself on being the first to build this competitive stablecoins market. He noted that more industry players will help regulate the market better.
Believe it or not, ‘Let everyone grow so that the sum of all votes may be louder’. is what will make the stablecoin industry much more solid in the long run. So yes. We don’t mind seeing growth. We welcome everyone. The only thing that matters to us is that the game is fair and equal.
Today the US Congress will discuss the regulatory measures for stablecoin. Treasury Secretary Janet Yellen and Fed Chairman Jerome Powell will look into the matter.
Continue reading: Treasury Department’s Janet Yellen meets the SEC, Fed and CFTC today to discuss stablecoins