USDC Transaction Volume 5x USDT Volume Due to FTX Crash

USDC Transaction Volume 5x USDT Volume Due to FTX Crash

USD Coin

The popularity of the stablecoin USDCoin (USDC) has grown since the crash of the FTX exchange, and today the volume of daily USDC transfers is often four to five times higher than that of its main competitor, Tether (USDT).

This is despite USDT having a $23 billion market cap higher than USDC. As of January 10, the difference in transaction volumes was in favor of USDC by four and a half times.

Both stablecoins have seen a spike in transfer volumes following Binance CEO Changpeng Zhao’s infamous tweet on Nov. 6 announcing that Binance will be liquidating its entire supply of FTX tokens (FTT). Shortly thereafter, FTX went bankrupt.

Since then, USDC has been the preferred choice for cryptocurrency users, averaging $12.5 billion in daily transfers compared to USDT.

While each of the stablecoins is designed to trade at a rate as close to $1 as possible and backed by reserves held by its issuers, USDC is viewed by some in the crypto community as a potentially safer option.

Proponents point to USDC assets that are backed by cash or short-term U.S. Treasury bills and are subject to monthly audits by global accounting firm Grant Thornton.

For a number of years, Tether has been criticized for its lack of proper auditing and less transparency about its reserves.

The company behind USDT was fined $41 million in October 2021 by the Commodity Futures Trading Commission, which accused it of holding sufficient reserves only 27.6% of the time between 2016 and 2018, despite that its tokens were fully backed by fiat currencies.

Tether is reducing the amount of commercial paper backing issued tokens in favor of safer alternatives, and the latest asset breakdown on Nov. 10 shows nearly $46 billion of its reserves are made up of cash, bank deposits, and U.S. Treasuries.

USDT briefly lost its peg to the US dollar following the FTX crash amid concerns that it was exposed to Alameda Research and FTX, which Tether denied.

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