Is #Tether Becoming America’s Defacto CBDC?
In the stablecoin sector, Tether is emerging as a dominant force, with some suggesting it could become akin to a global central bank digital currency (CBDC). Discussions in the crypto industry, sparked by comments from Cantor Fitzgerald CEO Howard Lutnick praising Tether, highlight its potential. Lutnick, whose firm is a notable player in global finance, expressed his support for Tether, noting its significant treasury holdings, which exceed $90 billion.

The comparison of Tether to a CBDC has been a topic of discussion, with Glassnode analyst “Checkɱate” even declaring Tether as the de facto CBDC. He argued that Tether’s ability to operate despite potential governmental interventions signifies its strength and the U.S. government’s implicit approval. Checkɱate also pointed out Tether's role in the dollarization of emerging markets, where it is preferred over local unstable currencies, indirectly supporting the U.S. economy.

David Batten, a Bitcoin ESG advocate, highlighted differences between Tether and traditional CBDCs, noting that Tether doesn't directly involve itself in initiatives like green Bitcoin mining or educational partnerships.

The notion that Tether operates with U.S. government tacit approval was echoed by former portfolio manager Travis Kling, who remarked that Tether’s existence depends on U.S. regulatory acceptance. There's also been opposition in the U.S. to a Federal Reserve-controlled CBDC.

Meanwhile, Tether has been distancing itself from U.S. influence amid the broader crackdown on crypto. It has become the preferred stablecoin globally, particularly in emerging markets. Rob Hadick of Dragonfly Capital noted this trend, emphasizing Tether’s usage for transactions outside the regulated U.S./UK sphere.

Tether’s market cap has soared to a record $90 billion, securing about 70% of the stablecoin market share. In contrast, Circle’s market cap is around $24 billion, with its market share reducing to 18%. These dynamics underscore Tether's growing influence and potential as a global stablecoin leader.