Circle’s USDC is the world’s second largest US dollar stablecoin, currently with one-third of Tether’s USDT capitalization and circulating tokens. This scenario could soon shift as Circle announces a key partnership with the world’s largest crypto exchange, Binance.
On December 11, Circle’s CEO, Jeremy Allaire, and Binance’s CEO, Richard Teng, announced the partnership at Abu Dhabi Finance Week. As communicated, Binance will adopt USDC for its US dollar corporate treasury and integrate USDC with its products and services.
“Circle is without a doubt one of the most trusted and innovative companies in the digital asset ecosystem, and USDC is one of the preeminent products in the world. Through our strategic partnership, our users will have even more opportunities to use USDC on our platform, including more USDC trading pairs, special promotions on USDC across trading, and other products on Binance.”
– Richard Teng, Binance CEO
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At the same time, Circle will provide the exchange with the “necessary technology, liquidity, and other tools.” The executives have praised each other’s work and expressed optimism for what is to come from this partnership.
“With Binance rapidly becoming the world’s leading financial super app, and stablecoin adoption and utility at the core of this future financial system, this is a tremendous opportunity for USDC as it becomes ubiquitous on the Binance platform. I’m thrilled to be working with the Binance leadership team as they continue to build the largest digital asset company in the world.”
– Jeremy Allaire, co-founder and CEO of Circle
Can USDC surpass USDT in market cap?
For a long time, Tether has dominated the stablecoin sector in the crypto industry. In particular due to its high liquidity and exchanging volume, overperforming even Bitcoin (BTC) in this aspect.
As of this writing, USDC has less than one-third of USDT’s capitalization, with $40.86 billion against $138.65 billion. The volume difference is even more impressive, with Tether’s stablecoin having $1.84 trillion exchanged in the last seven days and Circle’s token only $120.77 billion.
However, this is mostly due to USDT’s presence in centralized exchanges and corporate treasuries. USDC is already the most used stablecoin in the decentralized finance (DeFi) ecosystem and has a larger presence in blockchains.
Therefore, if Circle manages to tackle and improve USDC’s presence in a place currently dominated by Tether, it is possible that USDC could challenge USDT’s throne as the leading stablecoin.
Tether already holds more US treasury bonds than powerful economies like Germany, Australia, and the UAE. This evidences how challenging it will be for Circle to increase its market share despite having more regulatory clarity.
In the meantime, decentralized stablecoin alternatives to both USDC and USDT are already surging and consolidating in the cryptocurrency space.
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