Centralized stablecoins don't just have issues, they are an issue for the crypto economy, KaikoData' s riyad_carey writes. Opinion for ProjectstoWatch2023
Stablecoins have become an indispensable component of the cryptocurrency ecosystem, denominating 80% of centralized exchange trades and playing a crucial role in the rapidly expanding world of decentralized finance . Providing a stable store of value and enabling seamless transactions in a volatile market, stablecoins act as a vital link between fiat and crypto – their importance cannot be overstated.
In a more general sense, this chart also shows a flight from two stablecoins that are transparent about their backing, USDC and the closely related DAI token from MakerDAO, into the perceived safety of a stablecoin that hasn’t released an independent reserve report this year, USDT. Last year, USDT’s issuer, Tether, was fined by the Commodities and Futures Trading Commission for lying about its reserve assets meant to back USDT.
USDC has since returned to its peg and the 3pool has moved closer into balance. However, USDC’s market cap has continued to fall while USDT’s is approaching all-time highs.Earlier this year, Paxos was forced to halt issuance of BUSD after the New York Department of Financial Services stated the issuer
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