Stablecoins Revenue Could Be Impacted By Fed’s Interest Rate Cuts – Research Study

CCData has shared their latest Stablecoins & CBDCs Report which offers an analysis of some of the key developments surrounding the evolving stablecoins ecosystem and CBDCs or central bank digital currencies.

In September of this year, the total market cap of stablecoins surged by a modest 1.50% to $172bn, registering the 12th staight increase in the end-of-month market cap. This, according to the update shared by CCData.

However, the total stablecoin market cap still notably remains below the levels seen before the de-peg of Terra Luna’s UST in May 2022.

The CCData report also noted that the Fed interest rate cuts might potentially affect stablecoin revenues. With the leading five centralized stablecoins holding combined US Treasury Bills of nearly $125 billion, accounting for nearly 80.2% of their reserves, the Federal Reserve move to slash interest rates for the first time since March 2020 is expected to lead to $625mn in lost yearly interest income for each 50bps cut.

In addition to these developments, CCData pointed out in its report that the Digital Yuan Transaction Volume surpaossed 7tn RMB.

The research report pointed out that the cumulative transaction volume of digital yuan reached 7tn RMB ($988bn) by the end of June of 2024, as per the  report from the People’s Bank of China.

According to the CCData update, this is said to represent a significant growth of 6.10% from the last month and an increase of about 300% from the reported transaction volume as of June 2023.

The CCData report also noted that MakerDAO has now completed its official rebrand to Sky, and introduced another stablecoin.

The report added that Maker DAO has completed its rebrand to Sky, launching the Sky Dollar (USDS) stablecoin and Sky governance token.

Since its introduction on 20th September, USDS has now reportedly managed to reach a circulating supply of $458mn (as of 24th September), with users now said to be voluntarily converting their DAI for USDS.

As stated in the CCData report, USDS holders are now able to earn a 6.25% yield via the Sky Savings Rate module, which is said to be an updaterd version of the DAI Savings Module.

The report also confirmed that the overall stablecoin market cap continues to rise with USDT reaching new ATHs,

In fact, in September, the total market cap of stablecoins rose by 1.50% to $172bn, the highest since April 2022.

And Tether (USDT) reached an all-time high of $119bn, maintaining its dominance at 69.2%, while USD Coin (USDC) increased by 3.18% to $35.6bn. ‘

The CCData report added that MakerDAO’s DAI saw a 2.83% decline to $5.10bn due to conversions to Sky Dollar (USDS), which is now the tenth largest stablecoin with a $458mn market cap.

The report also mentioned that stablecoin trading is on track to record lower monthly trading volume.

The report added that trading volume for stablecoin pairs on centralized exchanges fell 39.4% to $683bn (as of the 23rd) in September.

The CCData report further noted that the overall trading volumes are on trend to record a lower trading volume this month as markets recover from the early sell-off with the Federal Reserve cutting interest rates for the first time since March 2020.



Sponsored Links by DQ Promote

 

 

Send this to a friend