By
Temitope Olatunji
April 19th, 2024
Despite the fact that customers may be shifting their focus to its competitor, Tether doesn’t see a threat.
Following a series of events that took place in 2022, it appears that the Circle-issued USDC stablecoin has suddenly found itself to be a favorite option among crypto users. According to a data report by blockchain analytics firm Glassnode, the USDC now sees a daily transfer volume of up to four or five times that of major competitor Tether USDT. That’s despite the USDT maintaining its status as the largest stablecoin by market capitalization.
Per the data, USDC has a transfer volume of $15 billion as opposed to that of USDT which is $3 billion. Altogether, USDC’s total transfer volume is $7 trillion more than USDT’s.
What Drives USDC Stablecoin Adoption?
It might be important to note that stablecoins are generally the easy choice for crypto investors. Particularly at a time like this, when market volatility remains at its highest. For some reason, however, USDC seems to be enjoying most of the attention. So, it all boils down to the fact that investors perceive USDC as a safer option.
Many USDC loyalists are always eager to point to USDC’s assets being backed by real cash or short-term U.S. treasuries. They also speak about how Circle ensures to carry out monthly audits and is usually transparent with the entire process.
Tether, on the other hand, has been severally accused of being economical with the truth when it comes to its reserves. The company behind USDT was slammed with a $41 million fine in October 2021. That was when the Commodity Futures Trading Commission CFTC accused it of not holding sufficient reserves for almost 72% of two years.
Additionally, many investors also had fears that USDT had exposure to FTX and Alameda. This was when it briefly depegged against the US dollar shortly after the FTX collapse. However, Tether has come out to put the fears to bed, saying there’s no such exposure.
Despite the fact that customers may be shifting their focus to its competitor, Tether doesn’t see a threat. The firm points to its consistent growth in terms of market capitalization, insisting that it shows “the market’s continued trust and confidence in Tether.”