The transaction volume of dollar-based stablecoins reached a new all-time high of nearly $ 55 billion in June. It continues to be dominated by the Tether dollar. But other stablecoins also gain space. The dollar is apparently becoming the key currency for cryptocoins.
Stablecoins are a bit like taking a grilled chicken and throwing away the skin: They use blockchains, but are tied to a fiat currency.
Still, there seems to be a strong need for a coin that takes advantage of blockchain but doesn’t take the disadvantage of high volatility. As a result, dollar-based stablecoins are becoming increasingly popular. In all cases except the DAI dollar, a central party deposits dollars in a bank account and issues stablecoins of the same value.
The driving force continues to be the Tether dollars, which alone have a payment volume of almost $ 45 billion. They are followed by the USDC dollars with a little less than 4 billion as well as the Binance USD and the DAI dollars. The PAX dollars, the TrueUSD and the Huobi dollars play rather minor roles.
After the stablecoins dominated the Ethereum economy in February, they are now the most important currency of the blockchains. In the meantime, they should also be able to transport more values than Bitcoin. Because of the change, one can only estimate the values actually transferred with Bitcoin; the blockchain.info charts show a payment volume of approximately $ 42 billion in June. In addition, the volume of Bitcoin seems to stagnate, while that of stablecoins is rising sharply. The dollar has replaced bitcoin as the leading currency for blockchains over the past few months – and while banks and central banks are completely ignoring the phenomenon, they are worried about planned stablecoins like Libra or the digital yuan and hesitant to start thinking about establishing their own stablecoins.
The dominance of the Tether dollars issued by Bitfinex’s parent company is also reflected in its market cap, which is now over $ 9 billion. The USDC dollars now reach just over a billion, while the Binance, PAX and Dai dollars raise between $ 150 and 250 million. Measured by market capitalization, the transaction volume of stablecoins is about ten times larger than that of Bitcoin. So every existing Tether dollar moves more than four times a month, while only every fourth existing Bitcoin moves once a month. Bitcoin therefore serves more as a store of value, while the stablecoins serve for transactions.
It is not known what the stablecoins are used for. However, the high volume of trading on exchanges, especially by Tether at $ 25 billion a day, suggests that stablecoins are primarily used to transfer values between exchanges. Stablecoins also seem to play an increasingly important role in decentralized marketplaces and DeFi applications. There are also reports that tether dollars are now used in the Russian-Chinese gray market; Finally, the payment service provider BitPay offers to pay out its merchants with stablecoins.
From a technical point of view, such values make us optimistic. The stablecoins use blockchain technology and give their users the same monetary autonomy as Bitcoin: the users keep their own keys, they can transfer pseudonymously with a high level of privacy, and on Ethereum the stablecoins also allow them to participate in applications of decentralized finance, for example, to Enjoy interest on savings. A “dollar without banks” should also make a good contribution to giving citizens in inflation-hit countries in the second and third world a chance to get their savings because the blockchain gives them much better access to dollars.
At the same time, this replacement of the key currency is a little sad. After all, Bitcoin is not just about giving users autonomy in payment. The goal was and is to establish a new currency that is no longer issued by the central banks, will be devalued in the long term as part of a monetary policy and will systematically exacerbate inequality. Instead, Bitcoin should and should lead the way into an age in which money is worth and incentives to save instead of spend. By making Bitcoin an asset rather than a store of value in recent years, and the payment system moving more and more to stablecoins, this vision could be jeopardized.