Here is our pick of the 3 most important stablecoin stories during the week.
Stablecoins and Crypto are stable whilst everything else is volatile!
This week, I noticed an interesting thing while researching how successful Binance’s conversion of their customers from USDC to BUSD has been. You may remember a few weeks back, Binance announced it was doing a one for one swap to its stablecoin to enhance their customers user experience and reward loyalty.
Well it has gone well, BUSD has grown to a 20b market cap, making it the third most popular coin. However, the overall market cap has held steady at or around 150b. In fact over the last five months that market cap has barely moved, while the Fiat world has gone crazy.
In the meantime and going in the opposite direction to Binance, Coinbase has made the exchange between Fiat and USDC free of Fees.
Part of the rationale for this move may be linked to the fact that outside of the US adoption of USDC has lagged.
“Currently, 3x more USDC is bought with USD versus non-USD currencies. In part this is because, outside of the US, users usually have to pay fees in the process of converting their local currency into USDC, and this is a barrier to broader international adoption.”
So in summary most currencies have lost over 20% against the USD. So while Crypto has fallen, if you are domicile outside of the US you have made money on the exchange rate and done particularly well if you happen to have had a big holding of USD stablecoins!
Alan Scott is an expert in the FX market and has been working in the domain of stablecoins for many years.
We have a self imposed constraint of 3 news stories per week because we serve busy senior Fintech leaders who just want succinct and important information.