Tether has achieved a circulating supply of $113.13 billion in July, marking a significant milestone since the collapse of the Silicon Valley Bank (SVB) in March 2023.
According to data from IntoTheBlock (ITB), the collapse of SVB in 2023 was a significant turning point for the stablecoin market as traditional finance institutions turned to USDT for stability.
Vincent Maliepaard, marketing director at ITB, explained that USDT’s accessibility and liquidity are the main reasons for its dominance as the preferred stablecoin for traders and investors.
The overall market capitalization of stablecoins has continued to grow after the SVB collapse, reaching around $150 billion in July 2024, according to ITB data. Regulatory initiatives like the new Swiss Financial Market Supervisory Authority (FINMA) stablecoin issuer guidelines have increased the global exposure of the stablecoin market.
This increased exposure has led to increased trust and liquidity in the market, with stablecoins like DAI, FDUSD, and USDM witnessing transactions exceeding $100,000, according to ITB data.
In July, Circle USD (USDC) made regulatory strides by becoming the first global stablecoin issuer to comply with the new European Union’s Markets in Crypto-Assets (MiCA) regulatory framework. However, despite this development and its $33.71 billion market capitalization, USDC still lags behind USDT, which has a market cap of $113.13 billion.
Maliepaard explained that USDT’s success is not only due to its role in decentralized finance and trading but also its broader utility.
A report by Elliptic Research on July 10 revealed that a Cambodian conglomerate group, Huione Group, was involved in facilitating online scams in Southeast Asia. The report showed transactions exceeding $11 billion linked to money laundering and cyber scams, mostly through the use of USDT. However, the use of USDT made it easier to track illicit funds through the blockchain compared to traditional fiat flows.