on the crypto
Dollar-backed stablecoins are thriving in response to Thursday's market crash. Tether's USDT has passed a market capitalization of $ 5 billion.
Over 500 million dollars minted
Tether's transparency page currently indicates that the USD has a market capitalization of $ 5,12 billion. Based on Whale Alert reports, it appears that Tether coined over USD 500 million in USDT in the days leading up to March 12th.
Tether also issued another $ 115 million in USDT in the following days. It appears that most market aggregators did not take these changes into account.
CoinMarketCap, for example, reports that Tether has one quotation $ 4,6 billion market and its graphs give no indication that Tether's overall offering or market capitalization has changed in the past week.
In addition, the official and unofficial numbers exclude both Tether stablecoins with support in Yuan, in euros and in gold, which together represent an activity for over 70 million dollars.
Tether's controversy remains boiling
Unlike Bitcoin, USD can be easily minted as long as Tether has enough guarantees to do so, which means that Tether creates and destroys USDT tokens in order to adjust the offer, a procedure which in turn maintains parity with the US dollar.
This makes it difficult to say whether Tether's decision to mint a large number of new tokens is actually based on real investor demand, and some critics are dissatisfied with Tether's auditing practices and wonder if he really has sufficient guarantees. Others argue that Tether is used in money laundering and market manipulation.
The stablecoins are thriving
Other stablecoins are also thriving despite the market crash. Circle CEO Jeremy Allaire noted that USDC's stablecoin is experiencing an increase in demand and that its circulating supply has grown to $ 568 million.
Just like Tether, USDC is supported by a central group called CENTER, which recently destroyed and coined several USDC tokens. Meanwhile, Binance CEO Changpeng Zhao reports that his stablecoin, Binance USD, introduced last September, has reached a market capitalization of $ 132 million, making it the fourth largest stablecoin.
However, not everything is going so well between stablecoins. MakerDAO has taken emergency measures to protect Dai, his Ethereum and the ERC-20-supported stablecoin from Thursday's crash. Maker is now auctioning governance tokens (MKR) as an additional answer.
Since Dai is supported and governed by individual coin holders, these coins cannot be minted or destroyed unilaterally. Decisions are made by consensus. It remains to be seen whether the cryptocurrency market will further decline and, in this case, whether the demand for stablecoin will continue to increase among investors.
