As a seasoned analyst with over two decades of experience in the financial industry, I have witnessed the rise and fall of numerous trends, from the dot-com boom to the global financial crisis. Now, as I delve into the evolving landscape of cryptocurrencies, I find myself intrigued by the emergence of stablecoins and their potential to reshape the financial world.
Starting from August 28, 2024, Coinbase Global Inc, a well-known American cryptocurrency exchange and publicly traded company (NASDAQ: COIN), will facilitate direct conversion between Euros (EUR) and the stablecoin EURC at a one-to-one ratio. Similar to USDC, which is tied to the U.S dollar, the value of EURC is backed by Euros.
EUR-stablecoins Challenges USD-stablecoin Dominance
In an email, the exchange confirmed that EURC complies with the European Union’s new Markets in Crypto Assets (MiCA) regulation. It is worth noting that conversion on Coinbase Advanced will not have any associated fees. A day after enabling the conversion, Coinbase plans to introduce a new EURC-USDC order book. This listing will simultaneously follow the deprecation of its existing EURC-EUR and EURC-USD order books.
According to Coinbase, these alterations aim to facilitate seamless transformation and exchange between traditional currencies (fiat) and digital assets backed by a stable value (stablecoins).
At present, a U.S. dollar-backed stablecoin holds the majority in the stablecoin market. However, Euro-backed stablecoins could potentially take the lead among non-U.S. dollar stablecoins. Interestingly, Euro-backed stablecoins account for an impressive 92% of the total supply of all stablecoins on Ethereum, once U.S. dollar-backed coins are removed from the equation.
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As an analyst, I’ve discovered that a mere 1.1% of cryptocurrency transactions conducted in Euros are facilitated using Euro-stablecoins. Changpeng Zhao (CZ), the CEO of Binance, has expressed concerns that the regulations proposed by MiCA could potentially make EU-licensed stablecoins more susceptible and riskier. For now, US Dollar-backed stablecoins are thriving in the market.
USD-pegged Stablecoin Gains Ground
1. In recent times, the market for stablecoins is making significant strides within the realm of established traditional financial institutions. Remarkably, PayPal’s stablecoin, PYUSD, witnessed a surge in popularity on the Solana blockchain last month. Data from DefiLlama indicates that there was a 230% rise in the total circulating supply of Solana-based PYUSD stablecoins in July alone. Since its launch on May 29th, their total supply has climbed to almost $252 million.
As a crypto investor, I’ve been keeping an eye on the PYUSD tokens, which debuted in August 2023 and are based on the Ethereum network. Out of the total supply of these tokens, approximately $329 million worth is currently circulating. Interestingly, over half, or about 56.6%, of this supply resides on the Ethereum blockchain. The remaining 43.4% of the supply can be found on the Solana network.
Ripple Labs Inc, a company specializing in blockchain payments, is continuing its efforts to release its dollar-backed digital coin, known as RLUSD. A significant step towards this was taken with the launch of a dedicated website for the offering. However, there’s a potential issue: some worry that RLUSD may attract scrutiny from the US Securities and Exchange Commission (SEC).
Although there are ongoing security concerns regarding RLUSD, members of the XRP community are optimistic that the introduction of a stablecoin could potentially resolve all legal disputes between Ripple and the regulatory body.
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2024-08-22 14:36