ie “crypto winter”? Global on-chain stablecoin volume breaks all-time record

Stablecoins have been pushed into the spotlight for their various uses and role in the ongoing meltdown of the cryptocurrency market. The development of stablecoins within the crypto community is highlighted by the volume reaching new milestones.

In this case, as of August 2022, the volume of on-chain stablecoins has reached nearly $1 trillion after recording steady growth over the past two years, according to data from CoinMetrics Indicates.

On-chain stablecoin volume. Source: CoinMetrics

Stable coins are growing in popularity

The growth is in line with the popularity of stablecoins, which are characterized by increasing global use cases.

Patrick Long, director of the WeTrust platform, highlights the enthusiasm for stablecoins, which he says stands out because of their years of use.

Initially, the use of stablecoins in the crypto sector was associated with acting as a safe haven in situations of increased volatility. However, the use cases have multiplied since then, especially with the growing popularity of decentralized finance (DeFi) applications.

Along these lines, many cryptocurrency companies have increasingly focused on adopting stablecoins in an effort to dominate the highly competitive market. For example, crypto exchange Binance has announced plans to remove access to three stablecoins that compete with its own coin, called Binance USD (BUSD).

Starting from September 29th, the exchange will automatically convert US Dollars (USDC), Pax Dollars (USDP) and correct USD (TUSD) coins into BUSD.

At the same time, many jurisdictions have raised concerns about the financial risks posed by stablecoins. Fears accelerated with the collapse of the Terra Ecosystem (LUNA) after the platform’s TerraClassicUSD stablecoin lost its peg to the dollar.

Concerns about the popularity of stablecoins

Most of the concerns are due to the private nature of stablecoins since the collapse of the Terra ecosystem has been linked to mismanagement by company officials. Notably, investigations are underway into allegations of fraud in the collapse.

It is worth noting that some of the early stablecoin regulatory initiatives saw the issuance of specific regulations from US states such as New York targeting this sector.

Meanwhile, other jurisdictions are exploring the use of stablecoins to power transactions. As reported by Coinphony, the Russian Ministry of Finance (Minfin) announced that it is ready to support the legality of transactions in the country through stablecoins.

According to Russian government officials, the use of stablecoins reduces risks and performs better than traditional settlement transactions.

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Which publication “crypto winter”? The trading volume on the global monthly stable series at a record level appeared for the first time on Coinphony.

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