Tether’s high transaction volume is a testament to the strong growth of stablecoins over the years. Despite the challenges facing the crypto industry, the stablecoin sector appears to be thriving. Increased adoption of stablecoins in countries with weak economic situations puts their fiat currencies at a disadvantage.
According to data from Coin Metrics, Tether’s daily settlement volume has surpassed that of the two major credit card companies, with Tether averaging around $22 billion, compared to Visa’s $15 billion and Mastercard’s $11 billion.
The growth in Tether’s settlement volume can be attributed to its growing popularity as a means of payment in the cryptocurrency ecosystem. Popular cryptocurrency exchanges, such as Binance and Bitfinex, use Tether as a base currency, allowing traders to trade while avoiding the volatility of other cryptocurrencies.
Additionally, Tether’s increasing use as a means of payment for goods and services has also contributed to its growing settlement volume.
The growth of the stablecoin’s settlement volume is a clear indication of the growing mainstream adoption of cryptocurrencies. It also highlights the potential for cryptocurrencies to disrupt traditional payment systems, as more and more people turn to digital assets to store and transfer value.
Tether Had a Difficult 2022
Despite gaining more usage in the past year, Tether still had a rough year.
The world’s biggest stablecoin received many concerns about reserves and payment following the failure of the UST in May and the FTX exchange in November.
USDT quickly lost the US dollar peg at the height of Terra’s FUD crash. During this period, stablecoin issuers redeemed more than $10 billion. Some traditional financial institutions have even taken Short positions against USDT because of speculation surrounding the company’s financial situation.
While USDT is still the dominant stablecoin in the crypto market, rivals like USDC and BUSD recorded victories against it in 2022. USDT’s market capitalization slipped from a high of $83.13 billion to a low of $65.31 billion during the reporting period. On the other hand, USDC’s market cap rose to $56 billion before falling.
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