Historically, Tether’s USDT has dominated the cryptocurrency market as the main source of cryptocurrency liquidity. However, data cited by on-chain tools has observed a clear shift in trader preferences as USDT loses some of its market grip to Circle’s USDC and Binance’s FDUSD.
Tether’s closest competitor, Circle, has a lot to do in the USDT space. Its USDC stablecoin is still about $100 billion behind the category leader.
Then there is FDUSD, Stable coin This fills the void left by the collapse of BUSD, which also gained rapid acceptance as a reliable USD-pegged stablecoin in high-volume BTC markets.
Trading sentiment in a post-mecha world
In the past month alone, the supply of the US dollar has declined rose With 954 million dollars. Supply growth has outpaced the value of USDT, which grew by just $792 million over the same period. Analysts believe that the USDC may have gained an advantage thanks to MiCA regulations, which have been in full force across Europe since December 30, 2024.
FDUSD has also had great success, commander This represents 48% of the trading volume in BTC pairs on Binance. This is another subcategory of trading where USDT lost ground to another stablecoin as it was responsible for a 42% share of BTC trading.
CryptoQuant analysts believe that the growth in FDUSD trading activity highlights the token’s growing reputation as a stable cryptocurrency pegged to the US dollar.
Cryptoasset service providers must obtain a MiCA license to operate within the European Union. FDUSD and USDC appear to benefit the most from the new regulations.
On the other hand, the new regulations created a storm for USDT, which was dropped by exchanges operating within the EU region.
USDT has MiCA issues
MiCA, which stands for Markets in Cryptoassets (MiCA), is a regulation backed by a comprehensive framework created by the European Union to regulate cryptocurrencies, including stablecoins, to ensure financial stability and consumer protection.
The European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) oversee compliance with MiCA.
MiCA was proposed in 2020 and was gradually implemented, but full compliance was required by the end of 2024. The purpose of MiCA is to replace fragmented national regulations with a single EU-wide framework that will affect all stablecoin issuers operating in the European region.
It appears that Tether is making changes to its company. Monday, that Announce Registered in El Salvador. The announcement also added that the company will move its operations from the British Virgin Islands to the Nayib Bukele-led, cryptocurrency-friendly Central American country.
USDT operates globally, with significant participation in various international markets and blockchains. However, it has always been plagued by regulatory hurdles and a lack of transparency regarding its reserves and financial audits.
In the United States alone, USDT has faced various legal challenges including a major case involving the New York Attorney General. In 2021, Tether and Bitfinex had to pay a fine of $18.5 million to settle allegations of misleading statements about their reserves.
Tether’s USDT coin continues to dominate the stablecoin category even though it has chosen not to comply with MiCA regulations in Europe just yet. It still has a lot of use in other regions with widespread cryptocurrency adoption and huge trading activity, including Asia, Africa, and North America.
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