Tether is experiencing an unprecedented challenge to its status as undisputed stablecoin market lodestar.
With over 50 active stablecoin projects emerging around the world and even more set to debut in the weeks and months to come, these are fraught times for the stablecoin founded in 2014, as the market explores alternatives to USDT amid suspicions of overstated US Dollar reserves and lack of transparency. CCN recently reported that four stablecoins were added to OKEx and Huobi namely, Paxos Standard Token (PAX), Gemini Dollar (GUSD), TrustToken’s True USD (TUSD) and Circle’s USD Coin (USDC).
PAX Takes The Lead
According to data from CoinMarketCap, of the chasing pack behind Tether, PAX is in the lead with a market capitalisation of $21.72 million, followed by TUSD at $19.62 million, GUSD caps $3.47 million, leaving USDC in the rear with $1.16 million. In only a few weeks of trading, PAX boasts of 63,206,483.08 PAX ($64,244,109.41) of total supply.
Built on an Ethereum framework, PAX is designed to offer all of Tether’s capabilities in addition to a decentralised accounting function and the supervision of financial regulators as a fully regulated asset, which gives investors greater confidence than the somewhat murky nature of Tether.
In an interview with Forbes, Charles Cascarilla, CEO and co-founder of Paxos said:
“Paxos Standard gives financial markets the power to transact in a fully USD-collateralized asset with the benefits of blockchain technology and oversight from financial regulators. We believe that Paxos Standard represents a significant advancement in digital assets, leveraging the oversight and stability of the traditional financial system and enabling a frictionless global economy…In the current marketplace, the biggest hindrances to digital asset adoption is trust and volatility. As a regulated trust with a one-to-one dollar-collateralized stablecoin, we believe we are offering an asset that improves on the utility of money.”
Crypto Community Ditches Tether, Backs PAX
Amidst investor fears fueled by the Tether Foundation’s perceived lack of transparency, USDT recently experienced a downturn followed by a sudden investor exodus that took more than $300 million out of the market. As a result, Tether is currently in a very uncomfortable position as many USDT holders panic-sell and look for alternative assets to hold value.
Following the sudden exodus, Tether hit a record low of 85 cents to the dollar on Kraken and 96 cents on Binance, both of which are hugely significant events for an asset whose value rests almost entirely on its tight USD peg. Bitcoin meanwhile jumped nearly 9 percent as USDT holders pumped funds into it and other cryptos viewed as less of an exposure risk than Tether.
In the midst of all this, a number of exchanges are also quietly dropping USDT in favour of alternative stablecoins. Last month, Digifinex, a top-20 exchange announced that it was replacing Tether with TUSD, citing trust issues. According to Digifinex co-founder Kiana Shek, the platform had been “looking to get rid of Tether for a hile”.
A number of prominent crypto industry figures have contributed to the continued USDT selloff with pronouncements promoting alternatives to Tether and highlighting PAX as a key alternative.
Binance CEO Changpeng Zhao recently tweeted:
Current fiat backed stable coin global 24hr volumes:
PAXOS: $3.7M (Regulated, and only recently listed on Binance for a few days)
Gemini Dollar: $79K
Learn about them and choose for yourself.
— CZ Binance (@cz_binance) October 7, 2018
Whether all of this will actually result in PAX taking Tether’s position is still mere speculation at this point, especially given that even after last week’s exodus, Tether still has a market capitalisation of $2 billion, which is several times more than its nearest challenger. What is clear however is that in the event that rumours of Tether’s death are not exaggerated, PAX seems best-placed to inherit the stablecoin throne.
Featured image from Shutterstock.
Source: cryptocoinsnews.com Read more here!