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Revised data from Messari and Coin Metrics shows that USDT has once again displaced XRP as the third-largest crypto by market cap. USDT growth shows the increasing role of stablecoins in the industry.
Leading stablecoin Tether (USDT) has unseated XRP for the second time in a month as the third-largest cryptocurrency by market capitalization. This apparently recurring milestone comes according to the updated ranking on crypto analytics platforms Messari and Coin Metrics.
As per Coin Metrics, Tether’s market cap is now $13.1 billion and this comes despite Tether’s parent company embroiled in several court cases. As it stands, Tether and its sister company, crypto exchange Bitfinex, are in the middle of a fraud investigation led by the New York Attorney General’s office over allegations that they conspired to shield an $850 million dollar void in Bitfinex’s finances.
This USDT growth also reiterates the growing traction stablecoins are amassing in today’s crypto sphere. Their potential shield against volatility has made them popular in cross border payments, a major provision that XRP has been riding on to trail second-placed Ethereum (ETH).
USDT Dominates XRP Despite Long-Standing Controversy
As Coinspeaker detailed earlier, Tether is a controversial cryptocurrency with tokens issued by Tether Limited. It formerly claimed that each token was backed by one United States dollar, but on 14 March 2019 changed the backing to include loans to affiliate companies. The Bitfinex exchange was accused by the New York Attorney General of using Tether’s funds to cover up $850 million in funds missing since mid-2018
Tether has repeatedly claimed that they would present audits showing that the number of tethers outstanding is backed one-to-one by U.S. dollars on deposit. They have failed to do so. A June 2018 attempt at an audit was posted on their website in June 2018 which showed a report by the law firm Freeh, Sporkin & Sullivan LLP (FSS) which appeared to confirm that the issued tethers were fully backed by dollars.
However, FSS stated:
“FSS is not an accounting firm and did not perform the above review and confirmations using Generally Accepted Accounting Principles,” and “the above confirmation of bank and tether balances should not be construed as the results of an audit and were not conducted in accordance with Generally Accepted Auditing Standards.”
Ripple Not in Competition with Tether
As the crypto sphere continue to experience what seems like an unending fight for dominance, a top executive of Ripple Emi Yoshikawa has cleared the air that XRP coin was not created to compete with stablecoins like USDT as well as Central Bank Digital Currencies (CBDCs), rather, XRP aims to complement these including its use in cross border payment and settlement solutions.
“There are various types of crypto assets, but I think that the role of XRP as a bridge asset in the international settlement is not a competition with Stablecoin or CBDC, but on the contrary, complementary. We believe that various stable coins and CBDCs will create synergy by responding to the liquidity problem by bridging independent crypto assets, XRP,” she noted.
With this assertion, we can understand that the now recurring displacement of XRP by USDT stems from users in the crypto sphere acknowledging the complementary role these two altcoins are playing. Besides its wide use as a stablecoin, USDT will rely on minting more coins to keep its market cap at par, Ripple will draw on its innovations to stay on the radar of the most relevant digital currencies in the world today