USDC overtakes USDT in terms of transfer volume

USDC surpasses USDT by transfer volume

From October to January, Circle’s stablecoin USDC surpassed Tether’s USDT in total transfer volume, as the stablecoin is widely considered a safe haven amid the FTX collapse.

The top stablecoins by market capitalization currently compete with each other in terms of transfer volume. Despite being the most valuable stablecoin by market capitalization and trading volume, USDT lost out to Circle’s stablecoin in transfers.

Data from Glassnode shows that between October 2022 and January 2023, the total transfer volume of USDC was five times higher than that of USDT. Shortly after the demise of FTX, there was a significant increase in new stablecoin transactions.

USDC overtakes USDT by transfer volume - 1
USDC vs USDT trading volume. Source: Glassnode

Why USDC Has Confidence

Some investors consider USDC to be a safer cryptocurrency than USDT. Certain elements in the blockchain space related to the two stablecoins have affected this.

USDT has had a very troubled background. The stable asset struggled to maintain its peg against the dollar in its early years and thus attracted arbitrageurs. But that wasn’t even the worst of its issues. Investors often require confirmation of reserves.

This proof will be necessary to confirm that the stablecoin issuer, Tether, has the necessary cash to cover the USDT it has issued. Despite the pressure, there was no external audit, which saved USDC from trouble. It was scheduled for 2022 but was postponed again last summer. Nevertheless, the company posts regular updates on its reserves on the website.

Circle realizes how serious the issue of reserves is for stablecoin investors. In addition to being a business focused on rules and regulations, Grant Thornton, a leading international accounting firm, conducts monthly audits for it. The last one, published in November 2022, shows that the repository fully backs Circle’s stablecoin.

Tether not disclosing its affiliation with cryptocurrency exchange Bitfinex was another factor that affected the trust in USDT to a great extent. If this information had not been withheld and had come to light only after the release of the Paradise Papers, the investors would not have had any problem.

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