Stable Currency Supply Shrinks as Market Share of USDT and USDC Increases

03/03/2023 00:06 • Crypto & Markets • 71 views

According to the report, according to the data of The Block Research, the supply of stable currency issued in February further contracted to US $128.4 billion, with a decline of 3.2%. The market share of USD stable currency USDT and USDC rose to 55.7% and 31% respectively. On the other hand, after the New York State Department of Financial Services ordered Paxos Trust Co. to stop issuing more BUSD tokens, about $5.6 billion of BUSD has been destroyed. In addition, the adjusted trading volume on the stable currency chain also declined to US $558.1 billion in February, a drop of 17.6%.

The supply of stable currency issued in February further contracted to US $128.4 billion, down 3.2%

Interpretation of the news:

The report highlights that there has been a contraction of stable currency supply issued in February, which has declined by 3.2% to reach US $128.4 billion. The dominance of USD stable currency USDT and USDC has further strengthened in the market, with their market share rising to 55.7% and 31% respectively.

The decline in stable currency supply can be attributed to the order given by the New York State Department of Financial Services to Paxos Trust Co. to stop issuing more BUSD tokens. A significant amount of BUSD tokens amounting to $5.6 billion has been destroyed following this order. While this regulatory intervention might have played a role in constricting the supply of stable currency, it might have also added to the confidence of investors who are looking for stable and risk-averse investment options.

The report also notes that the adjusted trading volume on the stable currency chain has witnessed a drop of 17.6% to reach US $558.1 billion in February. This could be an indication of how investors are becoming more cautious and conservative with their investments, owing to the uncertainty of the pandemic’s impact on the global economy.

The growing dominance of USDT and USDC in the market is indicative of the confidence that investors have shown in these stable currencies. This may also point towards the larger trend of investors reposing faith in stable currencies as against the volatility seen in crypto or traditional shares. The decline in the trading volume, however, suggests that the market is still feeling the effects of the pandemic, which has resulted in a sluggishness in the overall investment climate.

To sum up, the report highlights the changing dynamics in the stable currency market with the supply contracting and market share of USDT and USDC increasing. It also suggests that investors are being cautious in their investments and opting for stable currencies as they navigate the uncertainty created by the pandemic.

Overall, the report paints a picture of resilience and caution in the market, in a context where the uncertainties are manifold.

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Stable Currency Supply Shrinks as Market Share of USDT and USDC Increases

The supply of stable currency issued in February further contracted to US $128.4 billion, down 3.2%

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