This Week In Stablecoins — October 25, 2020
As stablecoins continue their march to $1 trillion market cap, here are the five stories we found most illuminating this week:
1. The “Stablecoins Surge” Is A Bullish Sign For Crypto
DCG State of Crypto 2020: DCG Founder Survey— October 23rd
In a recent poll of 150 founders of DCG portfolio companies, the “Stablecoin Surge” was viewed as the “Most Bullish Crypto Industry Development” by 15% of respondents, placing it third among the choices:
2. USDC Is Coming to Solana Blockchain
USDC announced support for its stablecoin on the Solana blockchain, marking the dollar-backed asset’s 4th blockchain integration, after Ethereum, Algorand and Stellar.
While Ethereum enables about 15 transactions per second (TPS), Solana offers over 50,000 TPS, which allows USDC to function “at scale and in a highly performant condition.” In early September, Tether announced its planned integration with the ultra high-speed Solana blockchain.
3. Tether Still Dominates Stablecoins Market Cap, But USDC and Dai Are Winning DeFi
While Tether still dominates all stablecoins in terms of market cap, DAI and USDC are making significant inroads in the fastest growing part of crypto, DeFi. Among six of the most popular DeFi protocols — Compound, Maker, Uniswap, Curve, Aave and Balancer; USDC and DAI both have higher Total Value Locked (TVL) then Tether. So while Tether is the go-to stablecoin for dollar-based crypto trading, USDC and DAI are emerging as the preferred stablecoins for decentralized trades.
4. PayPal’s Crypto Move May Be A Sign Of Their Eventual Use Of Stablecoins?
On October 21st, PayPal sent the crypto markets rocketing higher when they announced “…the launch of a new service enabling its customers to buy, hold and sell cryptocurrency directly from their PayPal account, …making it available as a funding source for purchases at its 26 million merchants worldwide”. PayPal will start supporting Bitcoin, Ethereum, Bitcoin Cash and Litecoin in the U.S. in the coming weeks, and will expand the features to Venmo and select international markets, in the first half of 2021. The service is enabled in the U.S. through a partnership with Paxos .
While the new offering has been widely reported, it’s interesting to think about the unique position that PayPal is in to support existing stablecoins and to start their own.
5. 88% of The Digital Yuan Received As Part Of China’s CBDC Lottery Was Spent In The First Week
The Chinese government announced that 47,573 out of 50,000 lottery winners in China hd received their prizes, and conducted a total of 62,788 transactions, spending a$1.3 million of the $1.5 million to be distributed. In addition, some winners topped up their wallets with an additional $134,000 in purchases of DCEP.
While China is barreling forward with its CBDC, the U.S. is increasingly at risk for getting left behind, with potentially dire consequences.
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