Data revealed by the Coinmarketcap earlier this week showed that investors over the past months have been dumping the stablecoin USDC for the rival USDT as US regulators clamped down on crypto firms.
In the crypto space, two stablecoins are rivals when it comes to leading in stablecoins, these are Tether’s USDT with a market cap of $67.55 billion and USDC with a market cap of $53.11 billion as of writing this.
Tether is the company behind USDT while Circle is the company behind USDC, however, recently, investors are dumping Circle’s USDC for its rival USDT, according to data from Coinmarketcap.
The market cap of both stablecoins which usually follow similar directions has been moving in opposite directions recently.
According to CMC on July 28, the aggregate value of Circle’s USDC stood conveniently above $55 billion until recently which has plunged by $1.5 billion.
Tether’s USDT didn’t behave the same way, during the same period, its market cap stood well above $65 million until recently which has soared by $1.8 billion.
These data show the fall in USDC is almost equal to the amount added to USDT.
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What Could Have Led To This?
As earlier reported by MyCryptoParadise, the US Treasury Department sanctioned the crypto mixer Tornado Cash last week.
In compliance with the Treasury Department mixing tools ban, Circle, the company behind the stablecoin USDC has frozen thousands of coins at addresses linked to the banned crypto mixers since the launch of Circle in 2018, however, the recent ban of Tornado Cash seems to be like adding fuel to the burning fire as Circle since the announcement of the ban has been freezing coins at addresses linked to the crypto mixer.
Tether on the other hand is Hong Kong-based crypto firm, it is not affected by the US mixing tools ban, although it had earlier faced a threat from the hedge funds, which after the US Federal Reserve interest rate hike, were trying to short Tether’s USDT majorly to creating another Terra episode in the crypto space.
Also in May, out of fear from what happened during the Terra collapse, investors withdrew nearly $7 billion of their funds from Tether’s USDT.
With the current move by Circle, it is getting more evident that crypto needs truly decentralized stablecoins, coins that are independent of any government.
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