The market capitalization of stablecoin Tether (USDT) has crossed the $30 billion mark.
At press time, USDT's market cap stands at about $30.5 billion, meaning there are more than 30 billion USDT in circulation, each pegged to track one U.S. dollar.
Tether has since long been the largest stablecoin in the market, but its popularity has surged even higher in recent months. Why? Because institutions and corporates are buying bitcoin, Tether CTO Paolo Ardoino told The Block.
Ardoino said these large customers prefer buying bitcoin from over-the-counter (OTC) and high-frequency trading (HFT) firms, rather than from a single trading platform, because these firms help avoid moving markets and have better liquidity.
By having accounts at most crypto exchanges, OTC and HFT firms spread the buying pressure, reduce the impact on bitcoin's price, and also complete purchases faster, said Ardoino.
When clients of these firms want to buy bitcoin, they send USD, and then these firms convert USD to USDT to bitcoin. This method is faster and "most convenient," Ardoino told The Block. Indeed, fiat transfers take time to process.
Asia and Europe remain the popular markets for USDT use, Ardoino told The Block, adding that Asia at the moment is "definitely more predominant."
While trading remains the top use case of USDT, Ardoino said Tether will be "working hard" this year on expanding its use cases, focusing on retail adoption of the stablecoin.
Tether is popular, but it is also controversial. Tether has never produced a full audit of its USD reserves. Tether's general counsel Stuart Hoegner recently said in an interview that the firm would provide a breakdown of its reserves at some point in the near future.
Last week, Tether's sister company Bitfinex said it repaid Tether the remaining $550 million loan, which is at the center of a fraud probe opened by the New York Attorney General's office three years ago. Ardoino said since the loan is no longer present, "that should please many in the crypto community."
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.