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In recent times the use of Stablecoin has gained momentum amid the high volatility and strong bullish trend currently at play in the cryptocurrency market.
This evidence has been attributed to the daily trading volume observed in major stablecoins around the world, which at the time of writing Tether’s price was $ 1.00 with a daily trading volume now at 43.4 billion.
Additionally, the fast-growing USDC, a stable coin project founded by Circle and Coinbase, has shown significant use among crypto investors in recent days.
Data recovered by Glassnode revealed that over 12 million USDC was moved in just two transactions a few hours ago.
READ: Bamboo says USD wire transfer option is no longer available for deposits
🐋 4.005.200 $ USDC ($ 4,005,393)
withdrawn from #huobi to the unknown walletView real-time on-chain exchange flow metrics: https: //t.co/0pfW4ubkCQ
– glassnode alerts (@glassnodealerts) November 29, 2020
🏠 8.002.839 $ USDC ($ 8,002,969)
transferred internally from #binanceView real-time on-chain exchange flow metrics: https: //t.co/0PjZqBMbdi
– glassnode alerts (@glassnodealerts) November 29, 2020
READ: Ethereum Whale Transfers Cryptos Worth $ 78 Million
What are Stablecoins?
Stablecoins are cryptocurrencies created to minimize the price swings that occur in an asset. They are usually pegged to fiat currencies and often to exchange-traded commodities.
Global investors and traders use it to give their investment portfolios exposure to the US dollar during these times when uncertainty is high due to the worst known pandemic (COVID-19).
Recall Nairametrics, a few months ago broke the news, US domestic banks have now allowed to hold reserve currencies for stablecoins (Tether, Circle), meaning more investors are now using stable currencies to protect themselves from the volatility often prevailing in the market of cryptocurrencies.
The letter issued by the Office of the Comptroller of the Currency (OCC) answers questions regarding the application of banking activities related to stablecoins.
It concludes that national banks and federal savings associations can hold “reserves” on behalf of clients issuing stablecoins in situations where coins are held in hosted wallets.
What you should know
Tether is designed as a blockchain-based cryptocurrency whose digital coins in circulation are backed by the same value as traditional fiat currencies, such as the US dollar, Japanese yen or euro. It is traded under the “USDT” symbol.
USDC is a fully guaranteed US dollar stablecoin. It is a coin powered by Ethereum and is the fruit of CENTER, an open source project initiated by contributions from Circle and Coinbase.
READ: Tether, the most promising stable coin, now the third most valuable cryptocurrency
- USDCs are issued by regulated and licensed financial institutions that maintain full reserves of the equivalent fiat currency in a ratio of USDC 1: USD 1.
- Stablecoin investors earn by earning dividends from newly created digital currencies given to them for holding such stablecoin shares.
Explore the data on the Nairametrics research website
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