The USD stablecoin Since FTX’s demise has become well-liked. Data from blockchain monitoring company Glassnode shows that it now regularly hits daily transfer volumes that are four to five times higher than those reported by significant competitor Tether. This is true even though USDT market worth is $23 billion higher than USDC’s. By a factor of four and a half as of January 10, the differential was to USDC’s advantage.
Following Changpeng Zhao, the CEO of Binance controversial’s tweet on November 6 indicating Binance would sell off all of its FTX Token holdings, both stablecoins saw increases in transfer volumes. Soon after, FTX declared bankruptcy.
Since then, USDC has gained popularity among cryptocurrency users, with USDC averaging over $12.5 billion more in daily transfer volume than USDT, according to Glassnode data.
All stablecoins are backed by reserves that are by their issuers and are intended to trade as similar to one U.S. dollar as feasible, some in the cryptocurrency community believe USDC to be a potentially safer alternative.
Supporters cite the USDC’s assets backed by cash or short-term U.S. Treasury bonds, as well as the monthly audits conducted by the renowned international accounting firm Grant Thornton.
The Commodity Futures Trading Commission impose a $41 million fine on the business behind USDT in October 2021 after alleging that it only maintains adequate reserves 27.6% of the time between 2016 and 2018 despite claiming that its tokens were completely backed by fiat currencies.
The most recent asset breakdown, released on Nov. 10, reveals that approximately $46 billion of Tether’s reserves are made up of cash, bank deposits, and U.S. treasuries. Tether has been phasing out the commercial paper that backs its issued tokens in favor of safer alternatives.
USDT Momentarily Drifted Away From the U.S. Dollar’s Peg
Following the FTX crash, USDT briefly lost its peg to the US dollar due to worries over exposure to Alameda Research and FTX, which Tether disputed.
The two companies may have been attempting to short the stablecoin, according to on-chain data.
Up to May 2021, when Tether boosted the token’s supply from $8.79 billion to $61.82 billion in the preceding year, a rise of 603%, USDT had been registering transfer volumes far greater than USDCs.
Tether has cited the rise in market capitalization as evidence of “the market’s sustained trust and confidence in Tether” notwithstanding the ensuing shift in consumer preferences. It stated that each token could be exchanged for USD.
Crypto.com delists USDT for Canadian Users
User allegations that went viral on social media claim that the cryptocurrency exchange Crypto.com will delist Tether. The exchange has informed its users that their Tether will be automatically changed into USD Coin. If they do not remove or convert their USDT assets before the deadline (USDC).
If USDT deposits are made from external wallets after this suspension period. “You may be charged a retrieval fee and fund retrieval may not be feasible in some situations,” the statement reads.
The Ontario Securities Commission accepted the company’s pre-registration undertaking for operations in Canada.
Digital assets outlawed by the OSC, including USDT, are not allowed to be listed on cryptocurrency exchanges. Operating in the Canadian province of Ontario due to regulatory constraints. Similar to Coinsquare, USDT is not yet listed as one of its possible trading assets on Coinsquare. Cryptocurrency exchange governed by the Investment Industry Regulatory Organization of Canada (IIROC).
crypto dot com to delist USDT pic.twitter.com/3KD0gJlMkE
— chortly (@charlestrussel) January 10, 2023
The OSC never provided justification for its Tether restriction in its conclusion. The only U.S. dollars owned by Tether, allegedly supporting the over 442 million tethers in circulation, is the about $61 million on deposit at the Bank of Montreal, according to a document that was unveiled on February 17, 2021. In the meantime, experts occasionally questioned the veracity of Tether’s audits and reserves.
Right now, in order to operate in Canada, all potential cryptocurrency exchanges must register with the IIROC. The OSC has previously had concerns with exchanges including Binance, Bybit, and Huobi about their regulatory status.
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