The stablecoin market has seen relentless growth in 2021, with supply up 388% according to data compiled by The Block Research.
as stated inreport The Block Research’s 2022 Digital Asset Outlook finds that stablecoin aggregate supply has increased from $29 billion at the beginning of the year to more than $140 billion. The majority of that growth came from tether (USDT) and USD coin (USDC), which are managed by a group that includes Circle and Coinbase.
Several factors have contributed to the increase in stablecoin supply, and in 2021, retail investors place stablecoins on the decentralized financial protocol, or DeFi, to access their rewards.
Derivatives Market Growth Another factor is, according to Tether’s Paolo Ardoino, where most futures contracts are settled in stablecoin.
However, the stablecoin market faces further scrutiny this year. As pointed out by The Block Research, although legal issues have long been a concern with Tether But the entire market has drawn attention from regulators who question the potential system risks and affect the market as a whole. And should it be under the direct regulatory framework? A report by President Biden’s Financial Markets Working Group, along with other agencies, has recommended new legislation to allow stablecoin issuers to be regulated like banks.
Looking to the future, Circle CEO Jeremy Allaire said 2022 will be the year more companies turn to stablecoin to improve payments. He said that many people and companies Want to hold stablecoin which is creating demand for them all over the world.
“We are seeing demand in many areas at once… DeFi, CeFi and general traffic for payments too,” he said.
The post Supply of Stablecoin is up 388% this year, driven by DeFi and Derivatives Markets appeared first on Bitcoin Addict.