By Shelly Melancon (Switzerland)
Circle, creators of the third most popular stablecoin in the cryptocurrency space, have promised to be more transparent with the coin, USDC. This comes on the heels of reports of a proposed public listing by Circle, which will see shares of the company listed on the stock exchange. The use and adoption of the USDC have massively increased, suggesting that it could displace the Tether (USDT) from its highly coveted position.
CEO Jeremy Allaire announced the latest development on his Twitter page, where he said the firm would broaden the transparency bandwidth on the stablecoin as it sets up to publicly list on the New York stock exchange. The CEO stated that this was necessary as USDC becomes popular among retail and institutional investors. Tokenhell reported earlier that USDC is now the favorite of most investors among all stablecoins, which has seen it acquire massive trading volume on decentralized finance exchanges and protocols.
Stablecoins Backed By Reserves
Stablecoins are backed by either fiat or crypto reserves and have a 1:1 exchange ratio to the assets that back them. Tether (USDT), Binance USD, and USDC all have the US dollar as their reserves with the amount equivalent to the circulating supply of the stablecoins. While PAXG and DAI are respectively backed by real gold and Ethereum. Thus, stablecoins can be exchanged for the assets they are backed by or pegged to on a 1:1 standard. The vast reception of USD-pegged stablecoins is due to the trust investors have for the US dollar. If that trust is destroyed, it simultaneously affects both assets.
However, recently, Tether (USDT) came into the crosshairs of heavy criticisms after it was revealed that the firm behind the stablecoin was not being completely accountable about its fiat dollar reserves. Perhaps this might have contributed to the decline in USDT’s trading volume over the past months.
USD Coin Surpasses Tether (USDT) Trading Volume
In contrast, USDC trading volume increased and its total supply currently stands at $25.15 billion placing it in a second place position below USDT’s $62.7 billion total supply. Interestingly, USDC is now the most traded stablecoin on Ethereum smart contracts including Compound, Aave and MakerDAO. According to reports, USDT trading volume may decline in the coming months. Meanwhile, USDC holders on Coinbase Exchange will now be rewarded with a 4% APY. This suggests that more stakeholders in the crypto industry are embracing USDC to the detriment of Tether.
Circle revealed that it will publicly list before the end of the year. Upon its listing, the stablecoin firm would join Coinbase exchange which listed on Nasdaq a few months ago with the ticker, COIN. Circle will adopt the CRCL ticker, reports revealed.
According to CEO Jeremy, the firm plans to be at the forefront of public transparency with its decision. As concerns keep growing over crypto and the risks involved, more crypto firms may eventually capitulate to the ever-increasing calls for regulations.
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