USDT Issuance Commands the Stablecoin Market, Garnering 2.79 Billion Dollars in February

Crypto News– KuCoin Research, the analytical division of the esteemed global cryptocurrency exchange KuCoin, has unveiled its March edition report, shedding light on the dominant role of Tether (USDT) stablecoin issuance throughout February. According to the report’s findings, USDT witnessed a staggering surge in issuance volume, soaring by $2.79 billion, while USD Coin (USDC) experienced a notable increase of $1.76 billion. This surge in stablecoin issuance has contributed to the overall expansion of the stablecoin market, signaling a growing trend of investors injecting liquidity into the market through stablecoin assets.

USDT Issuance Commands the Stablecoin Market, Garnering 2.79 Billion Dollars in February

Interestingly, despite the substantial rise in stablecoin issuance, the volume of stablecoins held by Centralized Exchanges (CEX) did not demonstrate a corresponding increase. Instead, lending rates for USDT on several exchanges remained elevated, suggesting that the existing scale of USDT may not be sufficient to meet the diverse leverage demands prevailing in the market.

Consequently, spot lending rates across various CEXs surged, surpassing even the yields offered by US bonds by significant margins. This bullish trend in the cryptocurrency market has fueled speculation that the influx of stablecoins from traditional markets, aimed at capitalizing on arbitrage opportunities, will further drive market expansion.

Moreover, the report underscores the surge in FDUSD issuance and the resurgence of TrueUSD (TUSD), underscoring the dynamic nature inherent within stablecoin ecosystems. In February alone, FDUSD witnessed a remarkable surge in issuance, increasing by $710 million, reaching a total of $3.28 billion. This surge brings FDUSD issuance scale close to the levels observed during its initial launch in July 2023. Conversely, TUSD experienced price fluctuations, initially widening its premium compared to USDT but ultimately returning to the near 1:1 pegging range by the end of February.

However, amidst these notable developments, Circle’s announcement on February 21 regarding the cessation of USDC issuance on the TRON blockchain stands out as a significant development. This decision has had reverberations throughout the TRON ecosystem, particularly impacting the largest decentralized finance (DeFi) applications and a substantial portion of TUSD issuance volume concentrated on the TRON chain.