In June 2022, the market cap gap between USDC and USDT was only about $10B. It seemed as if USDC was closing the gap and overtaking USDT, its biggest rival. The two most popular stablecoins began the year with a market cap gap of nearly $36B.
However, a recent shift of events has seen Tether’s(USDT) market cap shoot up to over $67.9B compared to $52B for USDC. Therefore, opening a gap of nearly $16B between the two stablecoins. It seems unlikely for USDC to overtake its main competitor in the coming weeks.
In August 2022, Tether resolved to minimize commercial paper in its treasury and let its users redeem it for cash. Tether took the move despite the sanctions imposed on Tornado Cash by the United States Financial Assets Control Office.
Tether claims that the U.S Financial Assets Control Office has not yet asked the company to enforce the said sanctions.
Binance Convert Other Stablecoins to BUSD
In the past few days, USDC has faced some setbacks. For instance, Binance’s announcement on the ongoing plans to convert its users’ deposits and balances of USDC, True USD(TUSD), and Pax Dollar (USDP) into Binance USD(BUSD) could be a drawback to USDC.
However, Jeremy Allaire, the CEO of Circle Company that issues USDC, has downplayed the impact of Binance plans. He tweeted that Binance USD has limited usage outside its platform. Therefore, he believes that USDC is still the preferred stablecoin across several Centralized and Decentralized Exchanges.
Allaire continued to state that unless Binance manages to convince its competitors to rally behind the Binance USD, USDC could become the preferred option to move funds in and out of the Binance platform.
Mr. Paolo, Chief Technology Officer at Tether, supported Allaire’s argument terming Binance plans as a hostile takeover of rival stablecoins to gain the yield on their deposits.
USDC’s Future Unclear amid Merge Plans
USDC’s future holds uncertainties as a result of its long-awaited merge. In July 2021, the Circle company announced a merger with Concord Acquisition Corp. It valued Circle at over $4.5B.
However, in February 2022, Circle announced that it had terminated its original merger agreement with the Concord Acquisition Corp and entered a new one. It valued Circle at nearly nine billion dollars.