Changes in stablecoin market dynamics are signaled by USDC surpassing USDT.
The top brass is very keen on making sure that stablecoins are in line with democratic principles and open regulations.
A major change has occurred in the cryptocurrency market as USD Coin [USDC] from Circle has outsold Tether [USDT] in terms of stablecoin transactions.
In April 2024, USDC had more transactions than USDT (166.6 million vs. 163.6 million), according to Visa’s on-chain analytics.
An important question arises in the midst of these changes: How can the industry make sure that stablecoins respect democratic principles and follow the rules?
The views of the founder of USDC Circle
In a recent interview with the Bankless podcast, USDC Circle Founder Jeremy Allaire addressed the question posed above by saying,
Global regulation of stablecoins is necessary. Concerning issuers’ risk management and compliance responsibilities, certain standards should be set.
This sudden development highlights the need for regulatory action against Tether because of its suspected links to criminal activities. Additionally, it emphasizes how USDC is becoming a more popular stablecoin for transactions.
Circle executive Caroline Hill recently argued that dollar-pegged stablecoins would better reflect US values.
During her testimony before the House Subcommittee on Digital Assets, Financial Technology, and Inclusion, Hill touched on this matter. In her statement, she said,
“In my opinion, no business should be able to use the US dollar as a benchmark unless they embody these democratic principles internally, within their stablecoin that is backed by the US dollar.”
Additionally, she mentioned,
“I believe this committee should take that into consideration if Treasury believes it requires more authority to handle that.”
This shows how the crypto industry is struggling to balance its goals of free and fair competition with its need to comply with regulations in order to avoid potential risks.
Why stablecoins are important
Furthermore, Allaire elaborated on the importance of open and accessible regulations and laws in fostering competition and innovation within the stablecoin market by saying,
When stablecoin regulations are finally put in place, I believe a large number of businesses, including large banks, payment processors, and tech firms, will participate. I predict a dramatic rise in the level of competition.
Similarities to the late 90s internet and communications industries are being drawn. Additionally, he stated,
“At the moment, individuals are hesitant to enter this market due to a lack of clarity regarding the regulations. Therefore, I believe that facilitating free and fair competition should be a component of any regulatory framework.”
Taken together, these findings highlight the critical role that stablecoins play in the cryptocurrency market by enabling instant transactions.
They make up a sizable chunk, about 6.63 percent, of the whole cryptocurrency market, with a combined market cap of more than $161 billion.