Tether dominates +51% of stablecoin market cap as rivals under scrutiny

abdelaziz Fathi

Today, the market capitalization of Tether’s USDT stablecoin surpassed $69.8 billion, further helping cement its position as the world’s largest stablecoin amid a regulatory crackdown against rivals.

Tether

Tether, which is closely affiliated with crypto exchange Bitfinex, works across a diversity of different blockchains, including Algorand, Bitcoin Cash’s SLP, Ethereum, EOS, Liquid Network, Omni and Tron.

At the current circulating supply, Tether represents 6.25% of the $1.13 trillion cryptocurrency market capitalization and 51% of the $140 billion stablecoin economy, according to CoinMarketCap.

Tether, which is ranked the third biggest cryptocurrency by market cap, has been strengthening its dominance over the last few months after US regulators ordered Paxos to stop issuing Binance-branded stablecoin BUSD. Paxos has burnt over $700 million worth of BUSD, which eventually keeps only $14.5 billion worth of BUSD in circulation.

Earlier this month, Tether said it earned more than $700 million in the October-December quarter, which was added to the reserve backing its stablecoin (USDT).

Tether, which is owned by Hong Kong-headquarter Ifinex, also revealed a breakdown of its reserves, as well as a complete list of USDT reserve custodians. The breakdown, dated as of December 31, 2022, shows that Tether held 100% of its $67 billion reserves in consolidated total assets alongside excess reserves of at least $960 million.

Tether’s reserves remain “extremely liquid,” the company says, with the majority of its investments being held in cash, cash equivalents, and other short-term deposits.

Meanwhile, Tether moved $39 billion of its reserves to Cantor Fitzgerald, making the Wall Street bond trading house the custodian of its largest pool of reserves, based on its circulating supply. Details of how Tether managed those assets haven’t been widely known.

Tether has switched the accounting firm that audits the massive reserves that back its USDT token to BDO Italia, the 5th largest accounting firm in the world. It officially began working with BDO Italia in July 2022 for its quarterly attestations. With this alignment, the issuer moved towards the release of its attestations from a quarterly basis to monthly reports.

Tether seeks to reassure investors that its cryptocurrency is backed by U.S. dollars after the major stablecoin has been dogged by speculation that it holds insufficient capital to support its market cap of USDT.

As the company continues to face questions about what its USDT token is actually backed by, Tether has been reducing the amount of corporate debts in its reserves.

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