Stablecoin's Market Value Reaches All-Time Highs, and Companies and Institutions 'Tested the Water'

As one of the most important assets in the development of digital assets, stablecoins are also a gateway for money to enter the crypto market and play an important and involved role in the industry of cryptography. As the market value of fixed assets continues to rise, so too has interest from global financial and financial institutions and regulators.The Fed is no exception, Chairman Powell expressed his view at a recent meeting that “private coins can go hand-in-hand with digital currency.”

The issuance of stablecoins such as USDC and USDT is constantly reaching new highs and the market value is increasing, and the market value of USDT and USDC is around 8% of the total market value of exchanges between Bitcoin and Ethereum. At the same time, stablecoin competition is quiet, with USDC recently overtaken by USDT as Ethereum's stablecoin ad. In the process of innovation, many technology companies and enterprises have researched and tested stablecoins, and some countries are still extensively researching stablecoins to support modification. control the body.More recently, more senior executives have worked to support and strengthen regulatory stability.What is the current status of the Stability Parts? How does this affect the rise and fall of the cryptocurrency market? How will governance and innovation evolve?

High stable market data

Despite the recent decline in cryptocurrency assets, the market value of fixed assets continues to grow rapidly, supported by an increase in commodity prices in between by a fixed amount. According to data from Glassnode, as of January 16, the current round of USDT is $78.399 billion and USDC is $45.388 billion.The market value of USDC surpassed USDT, and the roundup levels of the two largest USD firms in the stock market reached new highs, which also set the overall market value of the stable market at a level record.

Blocks mentioned in the "2022 Digital Asset Prospects" report;The US dollar stability coin leads to a rapid growth of 388% in 2021.According to data from CoinGecko, the market capitalization of stablecoins as of January 17 was $172.3 billion, estimated for a period above $29 billion in early 2021. The largest member is US dollar stability coins USDT and USDC, previously provided by Tether, USD stablecoin issued by the company in 2014, and finally provided by Coinbase and Circle, the 'leaders' of the stable market. . with a fixed amount.

Stablecoin market rate information source: Coinecko

With more major USDC announcements from last year to this year,On January 14, USDC surpassed USDT for the first time to become the largest fixed currency in circulation around Ethereum.According to data from the cloud chain owner of Ouke, the total fixed value of Ethereum is 108.6 billion US dollars, of which the ERC-20 USDC cycle is 39.8929 billion US dollars and the ERC cycle -20 USDT is 39.828 US dollars. 10 billion. Although small, it shows that the strong competition between the two large fixed funds has combined to support the growth of the stable fund.

On the other hand, stable spending has also been hitting highs all the time. According to a report by the US President Task Force, between October 2020 and October 2021, fixed expenses increased by 500% and this adoption showed no impact. This can be supported by data,In 2021, the annual stability parts repair market volume exceeded $5 trillion, an increase of more than 370% from 2020.

Stablecoin Quarterly Volume Change Source: Coin Metric

So, is there a connection between the growth of stablecoins and the value of the cryptocurrency market? Historically, high price volatility in the crypto commodities market has often led to a further rise in fixed income securities. This also happens in the case of chains, and when the price changes, the fixed amount of the chain (advertisement or damage) also works.

Stablecoin Gaming et BTC ETH Price Data Source: OKLink

According to the OKLink article identifying the fact, although the overall profitability of the cryptocurrency market increases after providing stablecoins (USDT, USDC), the increase in the value of crypto assets has no effect. direct impact with the announcement of the stability of the USD. Change, as demand for fixed income increases due to flat trading, the value of USDT rises, leading to a crisis in fixed deposits.

Companies are testing the waters

With its rapid growth, coin stabilization is now one of the few digital assets recognized by organizations.At the same time, due to the unique nature of the coin, it is also a hot spot for global financial trading. In recent years, an increasing number of tech giants, financial banks and other organizations have started testing water stability coin projects.The most recent agent and agent was Facebook's DM (formerly Libra) project, which, although not yet complete, was very inspiring and beneficial for securing coins.

From today's perspective, the pace of global enterprises and financial institutions trying to innovate in a stable zone is even faster. In less than a month to 2022, Paypal, Bank of America and others have announced plans to create a secure digital currency.

According to Bloomberg on January 7, US payments giant PayPal has confirmed that it is improving its own access to stablecoins in the cryptocurrency space.The news comes after developers found evidence of the PayPal app's impact hidden in numbers, codes and images showing a new money-back guarantee called "PayPal coins". PayPal executives later confirmed the veracity of the news. PayPal is now one of the biggest with the largest cryptocurrency company in the payment space, with over 400 million users worldwide, and has announced the benefits of cryptocurrency in the UK United, the United States and other regions. In addition to Facebook and PayPal, another major mobile payment provider, Visa, was already allowed to collect its USDC (USDC) money to settle transactions on its network before last year.

In recent years, we have seen more and more companies and financial organizations strive to make their cryptocurrency work. Apart from large corporations, financial institutions such as banks are not far from providing stable capital.. According to the January 12 announcement, several US banks have announced that they will work together to create a stable USDF coin, one of which is developed by the USDF Consortium ™ Consortium) sponsored and supported by the Federal Insurance Corporation (FDIC) . . Established organization members, corporate president, including New York Community Bank, FirstBank and Sterling National Bank.

It is understood that the USDF stablecoin bitcoin provided by banks in the United States themselves and run on the Provenance blockchain supports 1:1 exchange for cash from all group members.The agency said the USDF's mission is to "address consumer protection and stewardship issues for non-bank securities." Unlike securities such as USDT and USDC, USDF only works on the Provenance system.

Regarding stable markets, Schna Shah, chief financial officer of Morgan Stanley, said in a statement that the banking industry may seek investment in the demand for fixed income securities in terms of exponential market growth. Since stable funds are based on blockchain technology, they can provide cryptocurrency deposit fees and access to DeFi while enhancing functionality. "

Room rules are stable

With the growth of the stable economy and the continuous development of new stable areas, the governments of the United States, Japan and other countries have paid close attention to stable funds.

A "stablecoin race" will appear in the "Stablecoin Report" published jointly by the Presidential Financial Services Task Force (PWG), the Federal Reserve Insurance Fund (FDIC), and the Office of the Secretary of the Treasury ( OCC) on November 1. 2021. Independent Banks (IDI)” such as regulated banks. The Office of the Treasury and Federal Reserve Insurance (FDIC) 2022 plan outlines rules and regulations for certain banking activities. “Will U.S. regulators maintain a stablecoin in 2022? Non-bank Stability Coin Issuers and the broader cryptocurrency market?

In line with the United States, financial institutions in Japan also plan to limit the number of stablecoins that can be exported from Korea. The agency plans to introduce the bill in 2022, the source said. Additionally, wallet resources that contain “stablecoins” will be regulated. They want these platforms to adhere to various security policies, including identifying user codes and reporting network malfunctions. It has already been announced that associations of about 70 Japanese companies plan to start testing next month and launch digital output (DCJPY) by 2022.

Determined by key elements of governance in the United States and Japan, the same terms contribute to the acquisition of more important decisions and the use of stable legal or regulatory resources. Of course, after the United States and Japan, Hong Kong financial institutions also released a series of cryptocurrency and coin discussions on January 12 this year. The document sets out MAS' vision for governance standards for crypto assets, particularly fixed coins used for payments, and states that it will establish governance procedures for the crypto tool by July this year. .

Thus, it can be predicted that the stable trade policy in 2022 is mainly due to the supervision of USDT, USDC and other USD stability coins in the United States and other countries. After all, the market value of USDT and USDC is around 8% of the total market value of Bitcoin and Ethereum, which is already large and remains an important channel to enter and exit the cryptocurrency market. . It is increasingly attracting the attention of related organizations. Salman Banaei, Research Director at Chainalysis, believes that US regulators can maintain a stablecoin by 2023 and that there are three main reasons why the US should tighten its grip on its stablecoins: 1. problems of security ; 2. Stablecoins can cause side effects. prediction. 3. Stablecoins have the potential to become legitimate competitors to collaborative payment models.

On the other hand, it is undeniable that stablecoins, which are new tools, have been identified and accepted in the financial sphere.

Former US SEC Chairman Jay Clayton says tokenized securities, stablecoins and other new digital assets could become part of the global financial market, including access to more companies and increased productivity through efficiency and innovation. industry. Additionally, Fed Chairman Powell said in a recent hearing that personal coins can be combined with digital cash. Therefore, the survival and development of a stablecoin in the future still requires our attention and further research which still has "a long way to go".