Bitfinex-backed Tether, the largest stablecoin issuer in the market, hasn’t minted even a single USDT on the Ethereum blockchain since May 2021. There are over 62 billion USDT coins currently in the market making it the third-largest cryptocurrency.
Tether has set a historical record by minting no USDT in the last 50 days on the Ethereum blockchain. The total value of the ERC20 USDT minted on the Ethereum blockchain is $28.9 billion. One reason for the halt of USDT minting on Ethereum is due to the high gas fee on the network back in May. However, the gas fee has come significantly down recently.
Due to the high gas fee, Ethereum lost its stronghold as the dominant blockchain to host USDT. In April 2021, Tron surpassed Ethereum in terms of hosting the highest number of USDT coins. As of date, Tron hosts more than 50 percent of the USDT in circulation with a total of 31.9 billion USDT minted on the blockchain.
Competitors Eating Into Tether’s Market Share
Several other USD-pegged stablecoins have gained prominence recently. Despite being the dominant player, Tether has been slowly facing the heat from competitors.
The USD Coin (USDC) from Circle is gaining solid traction since the beginning of 2021. A Messari report released last month showed that USDC has a massive demand from Defi users. So far, in the first six months of 2021, USDC registered a stellar 1800 percent growth. The total USDC coins in circulation have surged from 1.3 billion to 25.7 billion.
— Ryan Watkins (@RyanWatkins_) June 29, 2021
This shows that USDC is significantly closing the gap with the number of USDT minted on the Ethereum blockchain. The gap between the two players is now just 3 billion. Analysts believe that the ERC20 USDC minted on Ethereum will soon overtake the USDT supply. This will happen as Tether’s share of stablecoin supply on Ethereum drops below 50 percent.
Tether CTO welcomes the market competition
While a lot of competitors are eating into the market share of USDT, Tether’s Chief Technology Officer (CTO) Paolo Ardoino is not at all disturbed with the development. Ardoino has called it a healthy development! Commenting on whether competitors are taking the market cap from Tether, Ardoino 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.
He further added that Tether is proud of being the first to build this competitive market of stablecoins. He noted that more industry players will help to regulate the market in a better way.
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.
Later today, the U.S. Congress will discuss the regulatory measures for stablecoin. Treasury Secretary Janet Yellen and Fed Chair Jerome Powell will weigh on the matter.
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