Emerging Stabilization Coins Challenge USDT's Weak Results, New Opportunities for Public Chains or Stabilization Coins

The stable currency market has always been the focus of public attention. Last year, the collective birth of the major compliance currency and the first shot of the UST to overthrow the USDT monopoly, but now it is not very effective, and can even declare staged failure.

Why is the more compliant and safe stable currency unable to beat the crisisy USDT? Where are the opportunities for emerging stable currencies? What kind of pattern will the stable currency market form in the future? Chain Catcher hopes to bring more thoughts to everyone through this article, and welcome everyone to discuss.

With the arrival of this hot market, the trust crisis that USDT has experienced since May has almost vanished.

Taking the trading volume on May 14 as an example, the trading volume of USDT reached 215.7 billion yuan, which is more than 30 times that of all other stable currencies. The number of new shares issued by USDT in the past six months also exceeded the sum of all other stable currencies, indicating that although USDT is serious The problem is well known, but its dominance in the global cryptocurrency industry is still quite strong, and the actual impact and impact of other stable currencies are small.

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At the same time, TUSD, GUSD, USDC and other emerging stable coins tried to challenge the USDT dominance. Although there are certain progress and achievements, from the overall situation of the industry, these actions have basically declared phased failure.

01

Phased failure

Putting the time back to October 15 last year, due to the market panic, the price of USDT once dipped 13%. At that time, the emerging stable currency such as GUSD just got the license of the New York regulatory authorities, and concentrated on the transactions of Coinbase, Coin, and Coin. All.

At the time, the chain catcher wrote "Blocking the USDT to the Iron Throne", which means that the global mainstream exchanges have opened the door to the emerging stable currency, making the emerging stable currency have the opportunity to compete with the USDT in the same dimension. A major breakthrough in the history of stable coins. But now, this judgment is still too optimistic.

For the past six months, these emerging stable currencies have indeed done a lot of productive work. Since the problem that USDT has always been criticized is security, including whether the USDT issuer has problems with over-issuance and the full amount of the US dollar reserve, the major emerging stable currencies are almost all on the compliance and security level. Try to convince users that their stable currency is safer and use their own stable currency.

These measures include obtaining regulatory licenses, issuing audit reports on a regular basis, and launching real-time verification platforms for funds. All aspects of the data prove that these emerging stable currencies have sufficient US dollar reserves and no over-delivery. USDT, but the reality shows that the emerging stable currency, which is more compliant and safe, still fails to win the favor of users.

Although these emerging stable currencies are able to compete with USDT on the same platform, their trading pairs are always quite limited. They only have trading pairs in some mainstream currencies, and they never have a trading zone like USDT. This may be because The emerging stable currency did not meet the requirements of the exchange in terms of influence and liquidity. On the other hand, it may be that the stable currency issuer’s “lobbying” offensive against the exchange is not enough.

At the same time, users of major exchanges as cryptocurrency investors have a high tolerance for risks. Most users will pay more attention to practical experiences such as convenience and liquidity, and have strong trading habits. The group panic can make them temporarily give up the USDT, and the panic will gradually dissipate and then return to the USDT embrace. In this case, only those who have extremely high requirements for stable currency security or stakeholders such as issuers and market makers will tend to use emerging stable currencies for trading.

The direct result of all of the above reasons is that the number of users, trading volume and liquidity of the major emerging stable currencies are far less than USDT, and there is no significant indication of which stable currency has the opportunity to overtake the USDT.

Therefore, in the battlefield of cryptocurrency exchanges, USDT has won a staged victory in stable currency competition, but this does not mean that there is no chance for other emerging stable currencies.

02

New battlefield

The exchange is now the most widely used application of stable currency, but from a broader perspective, stable currency as a special chain of cryptocurrency, it has a wider range of applications in the public chain, including pledge hosting Decentralized transactions, cross-border payments, and legal currency deposit channels, but today are at a very early stage.

Take cross-border payment or forecasting market as an example. If users use mainstream cryptocurrencies such as Bitcoin and Ripple to carry out such activities, but due to the large fluctuations in the daily price of such cryptocurrencies, the user's entitlements may easily shrink. Therefore, users need a currency with less fluctuation in value for a certain period of time to avoid risks, and stable currency is the best medium.

This means that with the deepening of the public chain ecology, stable coins are likely to usher in a development opportunity in the public chain. Due to objective reasons such as slow progress in the chain business, USDT has gradually expanded its Ethereum and wave fields from the OMNI layer established on the Bitcoin blockchain, but its market share in the public chain is still very low.

At the same time, a large number of public chains have begun to accelerate the layout in the direction of stable currencies. However, due to the need to obtain complex procedures such as compliance licenses and fund custody, it is necessary for issuers to have strong financial comprehensive capabilities. It is not a wise choice for public-license project parties to choose independent issuance. Therefore, most public chains choose to cooperate with existing stable currencies such as USDC and PAX to simplify the issuance process and give full play to the role of stable coins in the public chain.

All major public chains are actively seeking compliance credits to enter their ecology and improve their ecological systems. In the future, stable coins may become the necessary infrastructure for every public chain, and the market is broad.

However, due to the decentralization of the financial business and the public chain itself, it may be difficult to have a stable currency in the public chain industry as the USDT is in the leading position of the exchange, but the probability of forming a stable currency of three or five will be formed. An echelon has drastically changed the existing pattern of stable coins while promoting the popularization of the public chain business.

03

Giant entrance

In recent months, the most important information in the stable currency sector, such as Facebook, JP Morgan Chase and Samsung, has spread the news that it will enter the stable currency. It seems that the stable currency has become the focus of many technology giants and financial giants.

As an important hub connecting the world of cryptocurrency and the world of legal currency, stable currency is the strongest direction of potential compliance in the field of cryptocurrency, and it is also one of the most likely directions for landing. It is reasonable for these giants to see stable coins.

Take Facebook as an example, its issuing stable currency will be mainly used in online payment, cross-border transfer, advertising and other scenarios. Considering that Facebook has 2.7 billion users worldwide, this move will inevitably promote cryptocurrency and blockchain technology in the aforementioned crowd. Popularization and accelerate the development of the entire industry.

Because such stable currency has congenital landing scenes and giant endorsements, it can form a huge subversion of the existing stable currency market, but there is still a lot of uncertainty in this subversion. If the stable currency issued by Facebook is the same as the stable currency such as USDT and TUSD, it will be rushed to the top of the major exchanges and bring a series of regulatory issues. This is obviously not what Facebook wants to see. The high probability will be limited by specific technical means.

Therefore, the stable coins of the giants will bring more vitality and variables to the stable currency market, but in the short to medium term, it is difficult to form a big impact on the current mainstream stable currency, more like a parallel market, driven by different ways. Stabilizing the currency and even the scene of the cryptocurrency industry.

In addition, it should be noted that a large number of non-US dollar stable currencies are also accelerating expansion around the world. As the latest report of the Institute for the Study of the Stability of the Coin Anti-Aging Coefficient, the stable currency , such as the Sterling, Euro and Australian Dollars, can be legal currency, non-US dollar. Investor users in the country increase the global remittance channel and hedge against the legal currency risk, so it will be favored by some local users to a certain extent.

In general, the battles of stable coins in the exchange field have already begun to bear fruit, but the exchange is one of the vertical directions in the field of cryptocurrency. There is still a very broad space for development outside the exchange, and this is emerging. Stabilizing the currency challenges the USDT and new opportunities in the existing market landscape.

Author: Hu Tao

Source: Chain Catcher

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