The cryptocurrency supported by a consortium that includes Circle Internet Financial Ltd. and Coinbase Inc. seems to be grabbing the most attention among the recent slate of high-profile digital coins marketed as being coupled to the U.S. dollar.
Since its September debut, more than $127.4 million of USD Coin has been issued, according to cryptocurrency data tracker Etherscan. Paxos Standard was also introduced during the same month, which garnered $108 million in funds, while Gemini Dollar received nearly $13 million, according to Etherscan.
Bloomberg reports that more than 50 stable coins have emerged – with many more in the works – while it is enjoying a surge in demand amid a prolonged downturn in cryptocurrency prices. As crypto market leader Bitcoin decreased by more than 50 percent for the year, some trades are beginning to park funds in stable coin, which are being advertised as maintaining parity to the fiat currency they are pegged to.
“I will say that USD Coin is the most native to thce crypto world, with the least connections to traditional finance,” Aaron Brown, a business author and investor who writes for Bloomberg Opinion, said in an email. While other coins depend on the business success of their issuers, “USD Coin can survive on its own,” he said.
The USD is different from the others as it is not tied to one particular company. Centre, a consortium, will serve as a platform for users to make deposits from traditional bank accounts, convert fiat currency into tokens issued by members to facilitate transactions and provide the ability to shift back to the greenback.
Traders poured their money into the sector’s 800-pound gorilla, Tether, for quite some time, but with the stable coin market leader’s recent struggles, it is giving rivals an opportunity to enter. Concerns are also increasing that Tether many not be completely backed by U.S. dollar reserves, as it’s issuer claims, while its value has recently deviated from $1.
“Tether, battered as it is, is still vastly larger in market cap and usage volume than all the others put together,” Brown said. “Although it trades at a discount and the others trade at a premium, I don’t count it out.”