Stablecoin "second child" multi-chain charge
The stablecoin USDC (USD Coin) is planning to further expand its distribution to 10 blockchains including Tron, Avalanche, and Celo, in order to accelerate the increase in market share.
Since its birth in 2018, USDC has been catching up with USDT, the leader in the stablecoin field, with its compliance and transparency. Currently, USDC has a circulation of 25.218 billion, ranking second among all stablecoins, and is far behind USDT, which has a circulation of 63.046 billion.
Although the latter still dominates the stablecoin market, USDC is gaining more favorable conditions as the US regulatory attitude opens up. On June 29, Randal K. In his speech, Quarles saw stablecoins as an innovation that could potentially be deployed faster and have fewer disadvantages than CBDCs (central bank digital currencies).
Soon, Compound Labs announced the establishment of a new company to support new banks and institutions to exchange US dollars for USDC, and obtain an annual interest rate of no less than 4% in Compound; Coinbase also launched a USDC savings product to support retail investors to deposit USDC earn interest.
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USDC plans to add 10 new blockchain issuance places
USDC, the stablecoin with the second largest market share, is planning a massive offensive to further attack the number one position held by USDT.
On June 30th, according to the draft announcement of the USDC Management Center, it is expected that in the next few months, USDC will be listed on the 10 exchanges of Avalanche, Celo, Flow, Hedera, Kava, Nervos, Polkadot, Stacks, Tezos and Tron (wave field). issued on the blockchain network.
This will be a large-scale "money printing" plan, not only reflected in the imminent increase in the issuance of USDC, but also means that the circulation of the stable currency will increase exponentially.
TRON Blockchain also confirmed on its official Weibo that Center will soon launch the TRON version of USDC. Previously, the TRON version of USDT quickly became the first choice for users to transfer funds due to its low transaction fees, and the daily transaction volume of this blockchain has also increased significantly due to the emergence of USDT. Today, the issuance of USDC on TRON is regarded by the blockchain community as another major development in ecology.
As a fast-growing stablecoin, the most eye-catching label on USDC is compliance. In October 2018, USDC was officially issued by the Center Alliance jointly founded by Coinbase and Circle. Compared with USDT, which has less transparent US dollar reserves, USDC has a third-party audit company that regularly issues credible reports to prove that it has sufficient US dollars as reserves .
Since its release on Ethereum in 2018, USDC usage scenarios have gradually increased. A typical example is that Maker, a well-known lending protocol on the Ethereum chain, accepts USDC as collateral, allowing users to mortgage USDC to lend DAI and other assets. In the second half of 2020, USDC has been expanded to be issued on blockchains such as Algorand, Stellar, and Solana, extending the circulation boundary.
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USDC ranks second in the market capitalization list of stablecoins
Although USDT still dominates the stablecoin market, the data shows that USDC is growing rapidly.
In February of this year, the data released by Coin Metrics, an encrypted asset data analysis company, showed that the market value of USDT in the stable currency market accounted for less than 75% for the first time. During the same period, the market value of USDC has grown to an all-time high of 15%. The two ebb and flow, reflecting the rapid rise of USDC.
In addition, Tokenview data shows that on June 29, the total transaction volume of the USDT chain was 11.771 billion USDT, while the total transaction volume of the USDC chain was 11.82 billion USDC on that day. The transaction volume levels of the two stablecoins are already very close.
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Fed Gives Stablecoin 'Praise' Brings Environmental Advantage
The encrypted asset market has experienced years of development, and investors have long been used to exchanging encrypted assets with USD stablecoins as the pricing unit. USDT, as the earliest stable currency with the largest user base, has been widely adopted by major exchanges, and most trading pairs are denominated in USDT.
Few other stablecoins can compete with USDT in terms of user trading habits. However, because USDC is more compliant and transparent, it is easier to be accepted by supervision in the long run. In particular, the current U.S. regulators have shown an open attitude towards stablecoins, so USDC, which is closer to regulation, may become the party that "gets the first month".
In the early morning of June 29, Randal K. In a speech, Quarles saw dollar stablecoins as a financial innovation. "We don't need to be afraid of stablecoins," he said. The Federal Reserve has historically supported responsible private sector innovation, and the dollar's stablecoin may bring support to the U.S. dollar in the global economy through faster and cheaper cross-border payments. to encourage the use of dollars. And compared with CBDC (central bank digital currency), it may be deployed faster and have fewer disadvantages.
Randal K． Quarles said that concerns about stablecoins challenging monetary sovereignty are puzzling. He doesn't see stablecoins as a threat, just that there needs to be regulation on how they are constructed and managed. The Fed official even believes that improving the existing payment system and combining it with the cross-border efficiencies of stablecoins will likely make issuing a CBDC redundant.
On the same day that the speech was announced, Compound Labs announced the formation of a new company called Compound Treasury, and it was revealed that the company will work with Fireblocks and Circle to allow neobanks and fintech companies to convert U.S. dollars to USDC. These USDC tokens will be deposited into Compound at a guaranteed 4% interest rate.
From a broader point of view, Compound Treasury has created a connection. USD holders do not need to deposit their money in a bank, but exchange it for USDC to capture an interest rate of no less than 4% on the Compound protocol. It further increases the stablecoin scene, allowing it to not only act as the purchasing power of encrypted assets, but also have the function of earning interest.
On the following June 30, Coinbase also announced the launch of USDC savings products on its official website. Retail investors can deposit USDC to obtain an annualized 4% return. According to Coinbase, USDC is guaranteed by it.
After U.S. regulation affirms the innovative value of stablecoins, USDC is likely to attract the attention of capital institutions and become a guaranteed interest-earning asset.
At this time, USDT, which keeps a distance from supervision and whose reserves are not transparent enough, will inevitably fall into the disadvantage of competition conditions. USDT, which has occupied the leading position for a long time, is facing more and more rapid catch-up by latecomers.
