2020 has been a good year for Tether (USDT), and as of July 22, it reached a market capitalization of more than $10 billion. In March, it reached $5 billion, and a few months later, it is at $10 billion. This has made it come across as very liquid, stable, and trusted.
Tether officially announced the big accomplishment through their Twitter handle. The milestone was also announced by CoinGecko, which is a market price aggregator.
According to a report done by Cointelegraph, the massive growth stems from the conversion of other fiat currencies on exchanges to USDT. Paolo Ardoino, Tether, and Bitfinex CTO noted that Tether has enjoyed great support from 2014. It has come across as resilient and innovative as almost all exchanges use it.
The majority of Tether transactions come from transfers. Tether merged with the OMG Network Plasma sidechain to attain a cheaper transaction rate as the rates for Ethereum were going up. It is still one of the main customers on the Ethereum ecosystem, with over $6 billion USDT in the form of an ERC-20 token.
Tron is also a large Tether host with over $2.8 billion USDT, which is way higher than Tron’s market capitalization. Omni, the original Bitcoin-based USDT, comes third with $1.3 billion USDT. There are also other protocols such as Liquid, Algorand, and EOS, with Liquid having $17 million.
According to Adroino, Tether gives value to the startup ecosystem as it invests in startups that share its values and vision. One of the startups it supports is RGB, which works on bringing tokenized assets to the Lightning Network.
The tag of war with central bank digital currencies
So far, Tether is the leading non-governmental stablecoin. It is proving to be a threat to the central bank digital currencies, which are being developed to replace fiat currencies.
There are also chances that CBDC’s may co-exist well with Tether since Tether’s platform is versatile hence a multi-platform. Analysts are also of the opinion that all stablecoins do not serve the same purpose; thus, they are unlikely to clash.
Since most CBDC’s will be under the government’s watch, people may still opt for crypto-native alternatives. In a way, Tether is like centrally issued stablecoins since it has a freeze nature that can also be activated when there is a need.