For the first time, the number of USDC on the Ethereum blockchain (ETH) has surpassed USDT by reaching 40 billion units. However, USDT is still the leader in total number of units in circulation across all blockchains, but the gap between the two stablecoins is narrowing by the day.
USDC outnumbers USDT
Messari predicted it, the market did. The number of USDCs in circulation has surpassed that of USDT (Tether) on the Ethereum blockchain (ETH) and is enjoying the benefits of this to exceed 40 billion total units.
At the time of writing, 40.051 billion USDC are circulating on Ethereum compared to 39.828 billion USDT.
Both of these currencies are what are known as stablecoins, which are cryptocurrencies that are pegged to the price of the dollar at a 1:1 ratio. In short, one USDC or one USDT = 1 dollar.
Investing in stablecoins is becoming more and more attractive because they are much less subject to the volatility of the cryptocurrency markets. They are therefore particularly interesting investments in situations of market slowdown or decline for example.
USDC and USDT are present on several different blockchains and largely dominate the stablecoin market. However, it is interesting to note that for USDC, the vast majority of units in circulation are on the Ethereum blockchain. For Tether (USDT) almost half of the tokens are on the Ethereum network.
Tether (USDT) remains in first place, however, with a market capitalization lead of over $30 billion over USD Coin (USDC). However, USDC is still growing, and by leaps and bounds.
The USDC’s gain in ground is not new. In fact, the supply of USDC had already more than doubled in two months at the beginning of 2021.
Almost a year later, the USDT represents 53.37% of the stablecoins in circulation, its lowest rate ever. The USDC, on the other hand, is now at its highest rate of 29.38%.
USDT is sailing in troubled waters
Tether was the first stablecoin to gain traction in the crypto-currency market, as it appeared in the first. However, it has had several legal setbacks and has had several worrying flaws for its users.
In 2018, U.S. federal prosecutors had investigated following suspicions of bitcoin price manipulation with Tether.
The issuing company, Tether Limited, has always claimed that its USDT was backed by the dollar, which is inherently the role of a stablecoin. Except that in 2019, following a legal tussle, the firm’s lawyer had to admit that USDT was only backed by $0.74. In short, users were guaranteed less than the value of their investments.
To regain the trust of its users and to face the rise of its main competitor, USDC, the company announced in July 2021 that it would provide a detailed audit of its USDT. And just a few days later, Tether executives were once again accused by U.S. courts of fraud by concealing large transactions in the early years of the firm’s existence. A new blow in October: Tether Limited and Bitfinex were fined $42.5 million, again concerning the guarantee of the value of stablecoins.
In conclusion, even if Tether has made efforts by working hand in hand with justice by freezing addresses, containing USDT, considered as criminal, it will have to act very quickly to regain the trust of its users. To date, more than 500 addresses are frozen, for an amount of several hundred million dollars.