According to Bloomberg, Tether's USDT token is close to surpassing $100 billion in circulation for the first time. Stablecoins, which are crypto tokens pegged to another asset, use large reserves to support their value. They play a crucial role in the functioning of crypto markets, providing a less volatile alternative for traders looking to swap between digital assets and store their wealth.
Tether's growing market dominance may be seen as a negative for competitors, including those in the banking industry seeking similar success. However, it has not been a negative for the markets that need it the most. Stablecoins may soon face increased regulation in the US and Europe. JPMorgan analysts noted that stablecoin issuers that have been more aligned with existing regulations are likely to benefit from the upcoming regulatory crackdown on stablecoins and gain market share.
Tether has been working to improve the transparency of its operations and finances through quarterly reports. It is the most traded cryptocurrency and ranks third in market capitalization, trailing only Bitcoin and Ethereum. USDC, the seventh-largest digital token, has a market cap of about $27 billion, according to compiled data.