According to the latest report from CryptoQuant, stablecoin liquidity has broken new records, mainly due to Tether and Circle. In this sense, Ripple is looking to gain ground in the sector with its new token, RLUSD.

The high movement of stablecoins on centralized exchanges also signals bullish activity for Bitcoin.

Tether and Circle's dominance

The report particularly highlights an optimistic outlook, stating that stablecoin liquidity has reached new heights.

“Crypto market liquidity, as measured by the value of stablecoins, reached a record high in late September. The total market cap of major dollar-backed stablecoins now stands at $169 billion, an increase of 31% or $40 billion since the start of the year. Rising stablecoin market caps typically correlate with higher prices of Bitcoin and other cryptos by boosting market liquidity,” the CryptoQuant report stated.

Total Stablecoin Market Capitalization. Source: CryptoQuant

The report paid special attention to Tether (USDT) and Circle (USDC) for obvious reasons. These two assets, particularly USDT, hold overwhelming dominance over the market. Notably, these major players account for over 90% of the total stablecoin market cap.

The growth of these assets on centralized exchanges is particularly reassuring for markets. Stablecoins are often used as intermediaries for Bitcoin purchases on crypto exchanges, and their growth in liquidity is positively correlated with jumps in Bitcoin’s price.

USDT Reserves on Crypto Exchanges. Source: CryptoQuant

Read more: Stablecoins – Understand what stable coins are

Ripple's intentions

However, these two assets may face challenges to continue their dominance. New EU stablecoin regulations have particularly threatened Tether’s presence in the European market, which could present a major opportunity. In this regard, Ripple has been planning the launch of its own stablecoin for months and began minting the new RLUSD in late September.

RLUSD has grown to a market cap of $47 million and operates on both the Ethereum and XRPL networks. In this sense, according to additional analysis, RLUSD is particularly well-suited to the XRPL. This includes a high volume of US dollar and Chinese yuan traffic and infrastructure for remittances.

It is currently unclear how successful RLUSD can be in entering the stablecoin market. However, it could potentially acquire a considerable market share if it focuses on EU stablecoin regulations.

The article Ripple’s Stablecoin Could Challenge Tether and Circle’s Dominance? appeared first on BeInCrypto.