The market dominance in the US Stablecoin market has undergone significant in the past year, most of which are downward trends. Over the year, Circle’s USDC has witnessed a decline in its market share from 34.88% to 23.05 % whereas Tether’s USDT has gained ground by moving upwards from 47.04% to 65.89%. Also, the market capitalization of USDT has also soared to $83.1 Billion.
Alongside, the market participation of Binance USD has also plunged to 4.18% in the same period which was earlier 11.68%. On the other hand, Dai’s share is also at 3.66%, which was 4.05% in May 2022. Addressing Bloomberg in an interview, the circle CEO Jeremy Allaire has blamed the crypto crackdown by regulators in the USA as the prime reason for the declining market capitalization of the stablecoin. However, the current environment in the USA seems to be beneficial only for Teth er.
In the past years, Tether was criticized for its lack of transparency. As a result, Tether’s leadership battled this allegation and also focused on reducing their exposure to the traditional banking system after the shutdown of Silicon Valley Bank. As reported, in the first quarter of 2023 itself Tether pulled off $4.5 Billion out of banks which led to a substantial reduction in the associated counterparty risk.
Moreover, the company has boosted its US Treasury bills to the newer heights of around $53 Billion or 64% of its reserves. USDT is now backed by 85% cash and cash equivalents and short-term deposits when combined with other assets. However, the Circle is reportedly following the same strategy of adjusting its reserves to mitigate risk amidst the ongoing macroeconomic uncertainty.
