Bloomberg News reports PayPal Holdings Inc.’s introduction of its stablecoin could only do little to prevent the contraction of the digital asset sector. It would underpin the trade of most of the cryptocurrencies.
The Market Capitalization of Stablecoins
The total market capitalization of stablecoins, a digital currency whose value is pegged to fiat, another asset, plunged to $123.8 billion as of September, as per researcher CCData. This figure is the lowest since August 2021. In December, the sector was $137.9 billion.
What Was the Volume of Stablecoin Traded?
The volume of stablecoin that traded on central exchanges like Coinbase Global Inc. dropped 28.4% to $331 billion as of September. This was the lowest total monthly since July 2020, as found out by the researcher.
The contraction occurs at a time when the overall drop in the activities in the crypto market since the sector shook due to scandals and bankruptcies of 2022. One of the reasons stablecoins are used is to foster trading among the cryptocurrencies aside from shielding the holdings from volatility in price.
Bloomberg News reports that while the USD Coin and BUSD stablecoins’ market caps have begun to drop, Tether or USDT, the leader in the sector, has made its presence dominant, as shown by the CCData. At $83.4 billion, the USDT now accounts for 67.3% of the total market stablecoin. This is the highest percentage since March 2021, as per researchers.
PayPal and StableCoin
In the meantime, in August, PayPal introduced stablecoin. This is the first by a large financial company. Some proponents touted it as a potential boost in the sluggish adoption of digital tokens for payments. The ticket has a market cap of $110 million, according to CoinGecko, the data tracker.
