Stablecoin marketcap increases by $100 million every single day, and the world’s largest stable coin Tether (USDT) outperforms Ripple (XRP) by marketcap.
A stablecoin is a cryptocurrency pegged to other assets like the dollar or the euro. The current supply of stablecoins has been increasing by roughly $100 million daily for almost two months.
Coin Metrics co-founder Nic Carter in a tweet related to the rapidly growing stablecoin market cap to the boom in the DeFi sector. As many protocols are sucking up stablecoins to stay ahead of what seems to be a liquidity competition.
According to data from the crypto analytics website Tokenmarketcap, USDT has surpassed $13.9 billion in market capitalization. But XRP’s market cap stands at $11.5 billion.
Over the last 12 months, the market capitalization of XRP has always been below $13.5 billion. Today it is even lower than it was in mid-August when it rose to $14.5 billion.
This is completely different for USDT, which a year ago had a market capitalization of just $4 billion. In April 2020 it exceeded $6 billion for the first time, and in mid-May, it rose above $8 billion.
At the end of June, it surpassed $10 billion, exceeding XRP for the first time. But over the following week XRP recovered its third position. However, as of August 31st, the market capitalization of USDT rose to over $13 billion. Today its market cap is 13.9 billion.
Ripple’s senior director of global operations, Emi Yoshikawa, said that XRP is not competing with stablecoins or central bank digital currencies (CBDCs) like the imminent digital yuan. XRP aims to contribute to the growth of CBDCs and stablecoins.
Many new stablecoins have entered the market. DefiDollar (DUSD) is live on August 27. DUSD uses the primitives of DeFi to maintain its peg to one Dollar.
As DUSD is not a unit of debt obligation, it provides a swift arbitrage opportunity aiding in stabilizing its peg. To protect against fluctuations in price DUSD has a native staking pool which provides a volatility cushion.