As the overall cryptocurrency market continues to expand with more user participation, stablecoin providers have been competing to gain major market share. As it seems, stablecoin Tether (USDT) continues to dominate the market with a $61 billion USDT coins floating in the market.
However, it seems that competitors like Circle’s USDC and Binance’s BUSD are making major inroads in the market. This is because not a single USDT has been issued for the last two months. As a result, it share and the market value has dropped to a historical low of only 57.38%.
This has give enough room for competitors like USDC and BUSD to penetrate the market. During the same period, USDC’s share has jumped by 24.39% while that of BUSD has surged by 10.9%.
Tether’s Growing Regulatory Trouble
It looks as if Tether’s regulatory troubles aren’t ending anytime soon. Last week, the U.S. Department of Justice (DoJ) initiated a criminal probe against potential bank fraud.
As reported by Bloomberg: “federal prosecutors are scrutinizing whether Tether concealed from banks that transactions were linked to crypto”. The case dates back to the early days of Tether and over the suspicions of issuing extra USDT during 2017 bull run, without actually backing the with physical dollars.
Tether has said that it is ready to co-operate at all end with the law enforcement agencies. It looks like amid the regulatory crackdown, Tether has halted any fresh additions into the market.
It seems, the company isn’t willing to ruffle feathers with the regulators. Last month in July, Tether CTO Paolo Ardoino came clean on the matter. Commenting about Tether losing market share to its competitors, he said:
Everyone takes from the king, not from the smallest. Duh… (but click-baiting is more important). Competition and diversification are key for success in any industry.
Believe it or not but ‘Let everyone grow so that the sum of all voices will be louder.’ is what will make stablecoin industry much more solid in the long run. So yeah. We don’t mind seeing growth. We welcome everyone. We just care that the game is fair and equal.
As the regulatory landscape evolves further it will be interesting to see the role of stablecoins. Top U.S. authorities have stressed the need for regulating the stabelcoin market. Other market players like Paxos have called out Tether (USDT) and USDC issuers for issuing non-regulated stablecoins.