Although USDT and USDC stablecoins are today the market leaders, their own economic model could be their weak point in the future. Why that?
Will the USDC and the USDT face more competition?
As the cryptocurrency ecosystem is developing, stablecoins occupy an increasingly important place. During a report on this asset class, Robert Le, an analyst for the financial research company Pitchbook, highlighted Various elements according to which the USDT of Tether and the USDC of Circle could lose market share in the years to come.
Indeed, at a time when the United States has changed CAP vis-à-vis its relationship to the Blockchain ecosystem, the giants of traditional finance have more and more concrete experiences with these technologies.
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Where certain developments, such as the Paypal Pyusd, are still struggling to make a real place with the traditional model of collateralized stablecoins, other projects could have a card to play. For example, the analyst notably cites the Buidl de Blackrock tokenized monetary fund, or similar initiatives and projects by Franklin Templeton and Fidelity:
These funds token the actions of a monetary portfolio containing short -term state obligations or other cash equivalents. In doing so, they potentially create a “stablecoin” type instrument which could one day compete with the USDC, the USDT or other cryptocurrencies backed by fiduciary currencies.
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The competitive advantage of its funds is in the redistribution of the performance of underlying bonds, Which is not the case today of the USDT or the USDC ::
If these tokens become sufficiently flexible and widely accepted, they could erode the market share of existing stable emitters by offering not only price stability, but also a higher return transmitted to holders, thus reducing the advantage that historical actors derive from the conservation of interests on reserves.
In addition, another source of competition could be seen on the Visa side and its Blockchain Visa Tokenized Asset Platform (VTAP) platform. Given the fact that this technology must facilitate the deployment of blockchain solutions for banks, the latter could theoretically use it to deploy their own stablecoins.
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Of course, if we have mainly cited examples that can constitute Challenges for the USDC and USDTit is also a question of highlighting the market share they manage to conquer on the means of traditional payments. Among other things, we can notably note the many partnerships in Circle, such as the integration of the USDC as a payment option on Stipe.
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Source: Pitchbook
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Since 2021, I have devoted my free time to seriously train myself on cryptocurrencies in order to acquire maximum knowledge and credibility. I often have the opportunity to carry out interviews with influential personalities from the blockchain industry. I also conduct in -depth analyzes on web3 themes to offer exclusive content to cryptoast readers.
Vincent Mayor
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