- USDC has emerged as the dominant stablecoin on the Ethereum blockchain with 65% YoY growth.
- The market cap of stablecoins on the Ethereum network is $38.4 billion.
- With regulatory clarity, there is confidence in stablecoins.
Stablecoins are gaining popularity among cryptocurrency traders and investors due to their stability. Unlike volatile cryptos such as Bitcoin, stablecoins are pegged to a stable asset, such as the US dollar, making them less volatile. The use of stablecoins on the Ethereum blockchain has grown exponentially over the past year. According to CryptoMonday.de, the total volume of on-chain stablecoins on the Ethereum network has surged. Among them, USD Coin (USDC) has exhibited the highest year-on-year (YoY) growth, with a staggering 65% increase in volume.
The CEO of CryptoMonday, Jonathan Merry, commented on the data:
USDC Leads the Charge
USDC is a stablecoin backed by the US dollar. It is the most dominant stablecoin on the Ethereum blockchain, with a market capitalization of $38.4 billion. This accounts for almost half of the total stablecoin market on the network. USDC’s rapid growth is due to its use in DeFi applications, which have exploded in popularity recently.
USDC has become the go-to stablecoin for DeFi users due to its high liquidity and reliability. Most DeFi protocols require users to deposit stablecoins as collateral to earn interest or to borrow other cryptos. Due to its stability and high trading volume, DeFi users prefer it, thus driving up its volume on the Ethereum blockchain.
Regulatory Clarity Boosts Confidence
Regulatory clarity is another factor driving the growth of stablecoins on the Ethereum network. Stablecoins come under increased scrutiny from regulators due to concerns over money laundering. Yet, the US government’s clarification on the treatment of stablecoins boosted confidence in the market.
The move gave market participants more confidence in the stability of stablecoins. Besides, more people are keen to use them as a reliable means of payment and settlement.
The rise of stablecoins points to the growing demand for stable and efficient means of payment in the crypto market.
