Markets
Tether loses ground, market share falls to 74%
Attached USDT The market share of stablecoins on centralized exchanges (CEXs) has decreased from 82% to 74% since the beginning of the year.
This decline in dominance highlights the growing competition in the stablecoin market and the potential regulatory challenges facing Tether.
European regulations and new competitors
Despite its declining market share, Tether (USDT) remains the most widely used stablecoin, with a market cap of over $100 billion. Tether’s popularity is due to its ability to provide a stable, fiat-backed digital currency that facilitates seamless transactions and exchanges across the cryptocurrency ecosystem.
Kaiko Analysis report notes that Tether’s market share decline comes as the European Union prepares to implement new crypto-asset markets (Mica) regulation, which is expected to impact stablecoins like USDT.
MiCA will limit the sale of stablecoins to EU investors, which could lead exchanges such as Kraken to review their support for USDT.
Tether CEO Paolo Ardoino also Express is concerned about some aspects of the MiCA requirements and has said the company does not intend to be regulated under the new rules in the medium term.
This regulatory uncertainty could further erode Tether’s market share as exchanges and users seek alternative stablecoins that better align with emerging regulatory frameworks.
According to the report, the stablecoin market is diversifying with major alternatives such as Circle’s USDC Gaining traction.
Tether Suspends USDT Repurchases
On July 11, Tether announcement its plan to suspend USDT buybacks across multiple blockchain networks. The company said the move is aimed at ensuring the long-term sustainability of the USDT ecosystem.
Tether will be gradually removing support for USDT on multiple networks over the coming months. Specific timelines for each network will be provided separately to facilitate a smooth transition for users.
This strategic move is part of Tether’s efforts to streamline its operations and focus on the most widely adopted blockchain networks. By stopping USDT buybacks on less active networks, Tether aims to improve the overall user experience and maintain the stability of the USDT exchange rate.
In other news, DWS, a leading European investment firm, has established a new entity to be launched Germany first nationally regulated cryptocurrency. The company aims to introduce a euro-based stablecoin that is compliant with Germany’s financial watchdog, BaFin, by 2025.
Additionally, Tron (TRX) Founder Justin Sun revealed his intention to introduce a fee-free stablecoin that, if successfully implemented, could revolutionize the stablecoin market.
The stablecoin market continues to evolve, with significant contributions from companies like Coinbase and Circle. Coinbase rests on stablecoin revenues, while Circle’s recent approval to operate in Europe marks an important step towards establishing it as a global standard in the industry.