Distinct from conventional cryptocurrencies characterized by their price fluctuations, stablecoins are deliberately created to uphold a consistent value through their peg to a specific currency, such as the U.S. dollar.
Circle, the issuer behind the stablecoin USDC, has been facing tight competition from Tether. With almost $57 billion in market capitalization, USDT is proving to be a close rival to USDC. In one of the recent statements by Circle CEO Jeremy Allaire shared by Bloomberg, Allaire said the company is leveraging its $1 billion cash reserves to ride the drop in market share.
Also read: US Inflation Rises to 3.2%
Circle faces a drop in stablecoin supply since 2023 beginning
Data from The Block reveals that Circle’s USDC stablecoin supply has witnessed a notable drop since 2023’s beginning. USDC’s market cap witnessed a drop from its $42 billion market cap in January to its current market cap of $26 billion.
Also read: Microsoft Collaborates With Aptos to Explore Digital Payments and CBDCs
Allaire attributed the decrease in levels to Binance’s choice to shift focus from the stablecoin in September of the previous year in favor of its own stablecoin, BUSD. On the other hand, USDT’s market cap stood at $83.4 billion at press time, according to CoinGecko data.