Cryptoverse: Tether tightens grip on wobbling world of stablecoins

The world of stablecoins is suddenly looking shaky. Seismic shifts may be afoot in the $137 billion market after New York-based Paxos Trust Company, which mints Binance’s stablecoin, said it would cease issuing new BUSD tokens after US regulators labelled the asset an unregistered security. The US move has left investors questioning the future shape of the market for stablecoins, tokens that are usually backed by traditional assets like dollars and US Treasuries to tame the wild swings that characterise cryptocurrencies. The immediate impact hasn’t been negative for the stablecoin market as a whole, though; it’s actually seen its total value grow by $2bn since the Paxos announcement on Feb 13. “There’s way too much demand for dollar-based stablecoins for them to go away,” said Alex Miller, CEO at bitcoin developer network Hiro. Instead, rivals are vying to cash in on the woes of BUSD, the world’s third-biggest stablecoin, whose market value has shrunk to $12.9bn from $16.1bn, with its market share narrowing to 9.4 per cent from 12.1pc, according to CoinGecko.com. Market leader tether (USDT) has been a big beneficiary, adding $1.9bn to its market capitalisation to hit $70.3bn since the news. It now commands 52.6pc of the stablecoin market, up from just over 51pc.