Tether still has the largest market share of all the stablecoins, but it is now around 43%, according to CoinGecko. Glassnode reports that the USDT market share is a slightly higher 45% but still shows the same downward trend of its dominance.
According to the Tether Transparency Report, there are 66 million USDT in circulation, a steadily declining figure this year and down 20% from its peak of 83 billion in mid-May.
More competition in the stablecoin space means that all digital eggs are not in the same basket. Any potential regulatory action against one will not bring the entire system down as previously feared.
Stablecoin Market Share Rise
Stablecoins now control a larger share of the crypto market than ever before. Their slice of the global pie has surged this year as crypto prices crashed.
According to CoinGecko, the total stablecoin market cap is $154 billion, which works out at 15.2% of the trillion-dollar total cap for all crypto assets.
Tether’s main rival is Circle, which has seen its supply increase as the USDT in circulation has dwindled. There is currently 55.7 billion USDC in circulation, according to the company, giving a market share of 36%. The company claims that “every USDC digital dollar is 100% collateralized by cash and short-term US Treasury bills,” which is why users have switched to it.
Tether released a report in May assuring users that its reserves were fully backed and that it is reducing its exposure to commercial paper holdings. However, the ever-looming fear of regulation has created opportunities for rivals.
The third largest stablecoin is Binance USD, which has seen its market share grow 7.5x over the past two years. There are currently 17.8 billion BUSD in circulation, giving it an 11.5% market share. Decentralized stablecoin DAI ranks fourth with 6.4 billion in circulation and a 4.2% share.
The demise of the Terra ecosystem has spurred other copycats, such as Tron’s USDD, but it is still trading below its peg and has never really gained traction.
Aave Unveils GHO Stablecoin
The latest crypto platform to unveil a new stablecoin is DeFi lending protocol Aave. On July 7, a proposal was posted on the Aave governance forum for a new dollar-pegged GHO stablecoin.
Like Maker’s DAI, it will be backed by users’ collateral on the platform, which will be put up to mint the stablecoin.
The new offering enters a crowded stablecoin market comprising at least 85 different fiat tokens.
