Tether, a dollar-based stablecoin (USDT), has a market capitalization of over $120 billion. It is one of the most popular “cryptocurrencies” in the world, only topped by Bitcoin and Ether in total value. The stablecoin was launched ten years ago this October and has become the most popular stablecoin in use. Circle’s USDC is the second-largest stablecoin in use.
While stablecoins are mostly used for on/off ramping from crypto trading – creating a space where people may park their money without concerns of a loss in value, this is just the beginning. Stablecoins may represent the future of digital money – if correctly regulated around the world.
While some policymakers advocate on behalf of CBDCs (central bank digital currencies), many digital asset industry insiders believe that stablecoins represent the future of money and the transfer of value. Faster, more secure, and less costly than existing digital money rails. At the same time, having a privately issued digital dollar should help push back against the inevitable encroachment of governments keen on tracking and perhaps manipulating how people spend their money.
Stablecoins pegged to the dollar may also help ensure the fiat currency will maintain its supremacy as the world’s reserve currency.
CCData states:
“Today, nearly 65% of all trading activity on spot centralised exchanges and more than 80% of derivatives volume is traded through USDT pairs. Tether has also established itself as a vital tool outside of trading, with millions in high inflation-hit countries benefitting from the USD-pegged stablecoin. As of Q3 2024, the number of on-chain wallets that have received USDT has grown to 330mn wallets, with 36.3mn new wallets added in the last quarter.”