CoinMetrics data showed that the trading volume of stablecoins on the blockchain has grown steadily over the past two years, approaching the $1 trillion monthly volume cap as of last month.
The increase in the general use of stable cryptocurrencies day by day causes it to remain as the most preferred sector in the bear market. Stable cryptos, which are used as a safe haven by investors who want to stay in the crypto market in the falling market, have expanded their usage areas towards the DeFi market.
In this direction, cryptocurrencies, which initially emerged as dollar-pegged, continued to expand their market with the issuer companies issuing stable crypto assets to different country currencies. For example, Tether, the company that dominates the stable crypto market, has stable crypto assets indexed to euros, pounds, yuan, Mexican pesos and gold in addition to the dollar.
However, the competition for market share among crypto money issuers continues at full speed. While Tether has been the subject of criticism for many years due to the concern about transparency, USD Coin (USDC), issued by its biggest rival Circle, wants to excel in the field by emphasizing transparency.
A recent and important development in the stable crypto market was Binance's move. Binance announced that it will remove USD Coin (USDC), Pax Dollar (USDP) and TrueUSD (TUSD) stablecoins from its platform to gain an edge over its stablecoin Binance USD (BUSD), and will automatically convert these assets to BUSD at the end of the month.
In 2022, we have seen that algorithmic-featured stablecoins are on the rise in the stable cryptocurrency market. These cryptocurrencies are known as assets that operate by being pegged to different high-value crypto assets in the crypto ecosystem. Thus, algorithmic stable assets operate independently of traditional market assets, operating within the ecosystem.
This uptrend was turned down as the Terra ecosystem's algorithmic stable asset, UST, lost stability, causing the ecosystem to collapse. The collapse of the Terra ecosystem caused investors more than $ 40 billion in losses, while causing a domino effect in the markets, leading many crypto companies to bankruptcy.
This collapse has prompted the country's authorities with concerns that crypto assets that operate under fiat currencies may fall into the same situation. On top of this, especially developed countries opened a separate window to the stable crypto money sector and accelerated their regulatory efforts. However, there is no legal regulation yet.
In the developments that came to the agenda this week, the Minister of Finance of Russia announced that they can support the use of stable cryptocurrencies in commercial transactions. The Finance Minister thinks stablecoins, which he says are low-risk, are more efficient than traditional market transactions.