The stablecoin cryptocurrency sector grew 378%, based on data from The Block’s “2022 Digital Asset Outlook,” and by the end of December 2021, it had reached $140 billion. According to their report, these currencies show that they have found product-market fit and broader institutional acceptance among institutions like Centre (the company behind USDC). Centre is going public through a SPAC in the future.
The report revealed that stablecoin usage was at an alltime high in 2021. Compared to 2020’s volumes, the annual adjusted transaction volume on a public blockchain has surpassed $5 trillion. This represents 370% growth over the past year.
Why You Should Invest in a Stablecoin Now!
The stablecoins that were taken into consideration for this report are Tether’s USDT, Binance’s BUSD, The Centre consortium’s USDC, Huobi’s HUSD, Gemini Dollar GSD and Pax Dollar. MakerDAO is also included in the list of coins.
Tether is ranked #4 in the cryptocurrency space because it accounts for 47.7% of the entire stablecoin market cap, which stands at $163.8 billion according to Coinmarketcap. Tether’s impressive $78 billion market capitalization suggests that this one coin has a much larger share than all other coins in the crypto sphere combined (which currently stand at about $316 million).
Some regulators in America have expressed their concerns on the role of stablecoins and how they can cause an imbalance among cryptocurrency. Senator Elizabeth Warren, during her term which started in 2021, has had strong opinions on safe coins and the entire crypto space at large.
On December 15th of that year she explained that regulation is necessary to safeguard financial system stability for these coins are used as a lifeblood by DeFi ecosystem – people need them for trading between different cryptocurrencies or derivatives or lending money outside of regulated banking system without any risk exposure to instability.
Tether has been accused in the past of not having enough reserves to back up their stablecoin. One Bloomberg report even accuses Tether’s Chief Financial Officer, Giancarlo Devasini, of using company funds for investments in direct contradiction with what they have publicly stated about their own coin being fully backed at all times.
In 2022, as more people participate in the cryptocurrency space, we can expect to see a larger number of stablecoins issued and an increased overall market cap for their sector. However, with regulators clamping down on this area, it is likely that growth will be slow in 2022.
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Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
