Tether (USDT) market cap breaks ATH, Binance CEO points at regulatory caps

The market capitalization of Tether (USDT) stablecoin has reached a record-breaking high of over $83 billion, as its market dominance persists.

This year, as other stablecoin issuers are having difficulty maintaining their operations due to regulatory issues, the launch of the new ATH has been noted by cryptocurrency exchange Binance’s CEO Changpeng “CZ” Zhao.

In a tweet, CZ highlighted Binance USD (BUSD), the stablecoin created by Paxos and branded by Binance. The CEO of Binance noted that BUSD, which is regulated by the New York Department of Financial Services (NYDFS) and has a cap of $23 billion, currently has a market cap of $5 billion. Since then, USDT has seen considerable growth.

In February, the NYDFS mandated that Paxos cease all further issuance of BUSD, as it had violated security regulations.

At a time when the market capitalization of USDT has reached an all-time high, its rivals such as the USD Coin issued by Circle (USDC) and BUSD are having difficulty sustaining their share of the market. USDC, the second-largest stablecoin, has a market cap of $28.8 billion, which is a difference of more than $50 billion from USDT. To provide context, the market dominance of USDC was nearly equal to that of USDT at one point, with its market cap having achieved an all-time high of $55.8 billion in June 2022.

The prolonged bear market of 2022 had a negative impact on both stablecoins, as their market caps decreased after reaching their peak in June 2022. Despite this, USDT has managed to recover, increasing its market dominance, while USDC’s market cap has been drastically reduced by nearly half.

Lawyers say that the answer to the question “Are stablecoins securities?” is not straightforward.

The significant cause of the decrease in the market share of other stablecoins can be attributed to the examination by United States regulators and the U.S. banking crisis. Following the prohibition of new minting of BUSD due to safety violations, its market capitalization plummeted quickly as users began to change their BUSD to other stablecoins.

In a similar fashion, USDC experienced a major crisis due to the Silicon Valley Bank crash, where the stablecoin issuer had around $3.3 billion in reserves. This caused market anxiety and led to the coin’s detachment from the U.S. dollar. Even though USDC was able to recover its peg the following day, its market capitalization was greatly affected, with many people exchanging their USDC for other stablecoins out of fear of a total collapse.

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