As a new wave of DeFi platforms and products offering decentralized finance has kicked off in the crypto space, users are swiftly interacting with the ecosystem. Decentralized finance (DeFi) growing trend continues to expand as it provides new borrowing and lending solutions to its users by using blockchain technology, smart contracts, and cryptocurrencies.
The increasing trend of DeFi protocols also plays a significant role in the growth of stablecoins. DeFi rising demand for liquidity pools tokens; contributes to a massive rush in the stablecoins supply.
While highlighting the constant growth of stablecoins for the past couple of months, Coin Metrics co-founder Nic Carter said, “Everyone got so excited about DeFi no one pointed out that stablecoins have been adding $100m/day since mid-July,” said Carter. “DeFi yields/interest rates are clearly a vacuum sucking in a lot of stablecoins.”
With 80% Dominance, Tether Drives Stablecoin Market
Market data and industry inside report reveals that Tether still leads the stablecoin market by holding 80% dominance. As per CoinMarketCap data, Tether’s total market cap jumped to $13.7 billion from $9.2 billion on July 15, nearly a 50% increase. Moreover, analysis shows an almost 150% spike in USDT trade volume, from $21.9 billion to over $54 billion.
Observing the rapid increase of stablecoins, regulators also started taking notice. Investors could receive “useful benefits” from stablecoins, said Bank of England’s governor, Andrew Bailey. He also added, 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.” While describing valuable advantages of stablecoins, Bailey stress to establish international lawful rules and regulations for 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.”