Kaiko: The share of USDT on centralized exchanges has fallen by 13% since the beginning of the year

What’s new? Experts of the analytics platform Kaiko in their weekly review of the crypto market drew attention to the decline in the market share of USDT, the largest centralized stablecoin with a peg to the US dollar and capitalization of $110,7 billion from Tether. Since the beginning of the year, USDT’s share of total stablecoins on centralized crypto exchanges (CEXs) has fallen from 82% to 69%.

Kaiko report

What else is known? According to analysts, the decline can be partially explained by growing competition from other stablecoins. For example, FDUSD from Hong Kong-based issuer First Digital is gaining popularity thanks to promotions from crypto exchange Binance, under which no fees are charged for trading the asset paired with some cryptocurrencies.

Another reason for the decline in USDT’s share may be the emergence of innovative lucrative alternatives, such as the “synthetic dollar” USDe from the Ethena protocol based on the Ethereum blockchain. USDe has grown significantly since its launch in February, setting a record above $800 million in April amid the airdrop of the Ethena native token (ENA).

Overall, the stablecoin market remains highly concentrated. This year alone, the cumulative trading volume of USDT exceeded $3,6 trillion, which is almost four times larger than that of FDUSD, which is mainly traded on Binance.

The increase in market share is demonstrated by USDT’s closest competitor, USDC from US-based Circle with a capitalization of $33,4 billion. Of the top 5 similar assets by market capitalization, only USDC is regulated under US money transmission laws, its share has grown from less than 1% in 2020 to 11% today, indicating a growing preference for regulated alternatives, analysts stress.

Kaiko also added that stablecoins in general continue to gain market share against fiat money. The largest dollar- or euro-pegged stablecoins now account for 82% of all cryptocurrency transactions, while fiat currencies hold only 18% of the market.

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Earlier, Tether updated its organizational structure by launching business units for mining, education, venture capital investment, and financial services. Tether also added TON blockchain support for USDT, making the asset fully integrated with the Telegram messenger.