The current supply of stablecoins has been increasing by roughly $100 million daily for almost two months
According to Coin Metrics co-founder Nic Carter, the current supply of stablecoins BUSD, DAI, HUSD, PAX, USDC, USDK, USDT, USDT_ETH, and USDT_TRX has increased by about $ 100 million per day for almost two months. This shows that the rise of DeFi protocols and the need for tokens in liquidity pools could contribute to a sharp increase in the supply of stablecoins.
— nic carter (@nic__carter) September 3, 2020
“Everyone got so excited about DeFi no one pointed out that stablecoins have been adding $ 100m/day since mid-July.”
Source: Coin Metrics
Stablecoins are popular among the tokens used in liquidity pools for DeFi protocols, which have come out in larger numbers than ever before this year, offering ever-increasing yields in the competition to attract locked funds. DAI and USDC are also the most lent and borrowed stablecoins in the Compound protocol and are also the most borrowed stablecoins in the Aave.
However, Tether still holds 80% dominance in the stablecoin market. According to data from CoinMarketCap, Tether’s total market cap has increased from $ 9.2 billion on July 15 to more than $ 13.7 billion as of today, up almost 50 percent. USDT’s trading volume has grown by around 150% over the same period, from $ 21.9 billion to over $ 54 billion so far.
Regulators are also starting to pay attention to. Andrew Bailey, Governor of the Central Bank of England, said today that stablecoins could bring some “useful benefits” to investors in the UK. Such as minimizing friction in checkout.
However, he warned the following:
“The coins must have equivalent standards to those that are in place today for other forms of payment types and the forms of money transferred through them.”
Bailey also pointed out the need for coordinated international regulations on stablecoins:
“A global stablecoin is a cross-border phenomenon. It can be operated in one jurisdiction, denominated in another’s currency, and used by consumers in a third. The regulatory response must match this.”
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