Stability Concerns Mount as Supply of Stable Currency Contracts

03/03/2023 00:06 • Tech Ticker • 149 views

According to the report, according to the data of The Block Research, the supply of stable currency issued in February further contracted to US $128.4 billion, with a decline of 3.2%. The market share of USD stable currency USDT and USDC rose to 55.7% and 31% respectively. On the other hand, after the New York State Department of Financial Services ordered Paxos Trust Co. to stop issuing more BUSD tokens, about $5.6 billion of BUSD has been destroyed. In addition, the adjusted trading volume on the stable currency chain also declined to US $558.1 billion in February, a drop of 17.6%.

The supply of stable currency issued in February further contracted to US $128.4 billion, down 3.2%

Interpret the above information:

The report highlights a significant contraction in the supply of stable currency issued in February, with a decline of 3.2% to US $128.4 billion. This contraction in the supply of stable currency raises concerns about the stability of the market, and the possible impact on digital assets investors who rely on stable currency for trading purposes.

Further analysis of the data from The Block Research shows a shift in the market share of stable currency. USD stable currency USDT and USDC have emerged as the major players in the market capturing a market share of 55.7% and 31% respectively. The rise of these currencies demonstrates a shift towards stable currency with greater investor confidence.

However, there are concerns around the sustainability of stable currency’s growth. The New York State Department of Financial Services ordered Paxos Trust Co. to stop issuing more BUSD tokens, leading to the destruction of approximately $5.6 billion of BUSD. This move will likely have a significant impact on the market in the coming months as BUSD was holding a sizable market share.

Moreover, the adjusted trading volume on the stable currency chain also declined to US $558.1 billion in February, a drop of 17.6%. This decline could be attributed to a lack of investor confidence and stability concerns, which could be exacerbated by the contraction of the supply of stable currency.

In conclusion, the supply of stable currency contracting is concerning, as it raises questions about the stability of the digital assets market. The shift in market share towards USD stable currency USDT and USDC demonstrates a shift towards greater investor confidence, but concerns about the sustainability of growth in the market persist. The destruction of BUSD and decline in trading volume also highlight the volatility and instability of the stable currency market, which warrants a cautious approach from investors.

Overall, investors should consider diversifying their investment portfolios and conducting thorough research before investing in the volatile digital assets market.

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Stability Concerns Mount as Supply of Stable Currency Contracts

The supply of stable currency issued in February further contracted to US $128.4 billion, down 3.2%

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