The stablecoin market has reached a new stage of growth, with the total market capitalization hitting a new record, according to a report by BeinCrypto. This achievement was achieved as a result of a combination of technological innovation, clarity of regulations, and increased adoption by organizations of the sector.
USDT and USDC dominate despite the emergence of new competitors
DeFiLlama data shows that as of August 26, the market capitalization of stablecoins (excluding algorithmic stablecoins) reached an unprecedented level of $168.51 billion. Tether’s USDT leads the market with a market capitalization of more than $117 billion, accounting for about 70% of the total market capitalization.
Circle’s USDC has also seen continued growth. Although still below its peak in 2022, the market capitalization of USDC exceeded $34 billion in August 2024. These stablecoins reflect their crucial role in the broader cryptocurrency ecosystem.
Although USDT and USDC remain the dominant forces, newcomers such as PYUSD from PayPal (PYPL) and FDUSD from First Digital are gaining momentum. BeinCrypto reported that PYUSD’s market capitalization had surpassed the $1 billion mark at the end of last week. This achievement is particularly notable given the launch of PYUSD PayPal just a year ago.
One of the key drivers behind this rise was its integration with the Solana blockchain in May 2024, which opened up new opportunities for users in Solana-based DeFi protocols that offer attractive incentives, such as annual returns of up to 20% for PYUSD deposits.
Meanwhile, FDUSD has seen remarkable growth in Binance, which is the world’s largest cryptocurrency exchange by volume. FDUSD was launched in June 2023, and its market share on Binance peaked at 39% by the end of July 2024.
According to a recent report by research firm Kaiko, this rise was driven by Binance’s reintroduction of zero deal maker fees for FDUSD trading pairs. As a result, daily trading volume increased dramatically to an average of $6.5 billion.
Analysts at Kaiko warned that “the success of FDUSD depends heavily on Binance, as it is only traded on the platform and closely linked to its fee policies.”
Favorable regulatory developments have also contributed to the growth of the stablecoin market. For example, in the European Union (EU), the introduction of the Crypto Markets Framework (MiCA) in June 2024 provided the necessary clarity to stablecoin issuers.
This regulatory clarity has encouraged more institutional involvement, as large companies such as Circle have obtained the necessary licenses to operate within the EU. In addition, traditional financial institutions, such as Deutsche Bank’s DWS, have announced plans to launch regulated stablecoins, boosting the market’s credibility.
Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of any asset, nor is it considered a solicitation, offer, recommendation or proposal for investment. We would like to remind you that each asset is evaluated from multiple perspectives and its risks are high, so any investment decision and the risks associated with it belong to the investor. also We do not provide any investment advisory services.
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