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The race for stablecoin supremacy heats up as industry experts debate Tether’s role and new players like PayPal enter the arena.
Bloomberg Intelligence expert Jamie Coutts pointed to Ethereum’s (ETH) growing dominance, highlighted by key network adoption metrics and layer-2 projects like Optimism, Arbitrum, and Base.
👉But its pretty clear that #Ethereum will be the winner in the upcoming stablecoin wars
— Jamie Coutts CMT (@Jamie1Coutts) August 25, 2023
👉Across most network-adoption verticals, ETH or its broader ecosystem, which includes fast-growing rollup chains (L2s) such as #Optimism , #Base, #Arbitrum, lead all alternative networks pic.twitter.com/UOU7abtvN2
He anticipates that Ethereum’s scaling roadmap will drastically lower layer-2 transaction costs, thanks to the forthcoming EIP-4844. This comes as PayPal recently debuted its PYUSD stablecoin, fueling speculation that it might develop its own layer-2 network.
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The expert also predicts that stablecoins could outgrow Bitcoin’s user base in 3-5 years, driven by merchant integration, product innovation, and scalability. This aligns with recent data showing a record 17.4 million addresses holding more than $1 in stablecoins, a sevenfold increase since 2021.
Crypto expert Adam Cochran notes that Tether’s peg is unusually off despite open banking in Asia, Europe, and the upcoming US market. He attributes this to selling pressure from Binance-backed stablecoin accounts and hints that Binance CEO Changpeng Zhao (“CZ”) may be pushing new stablecoins.
13/16
— Adam Cochran (adamscochran.eth) (@adamscochran) August 5, 2023
So I don't think Binance is selling their Tether for two reasons:
1) They want to topple USDT to push stables they can control and gain from.
2) They realize Sun doesn't have the USDT he claims to and if users find out they might mass dump to escape his exchange.
A Twitter spat unfolded between Tether’s CTO Paolo Ardoino and CZ. Ardoino claimed strange transactions were “attacks” against Tether, while CZ labeled Tether a “black box,” favoring his stablecoins, TUSD and FDUSD.
Isn't it interesting that USDt is being pressured down (slightly, within 10bps, just to push market makers to react), and USDc, the main competitor that you would expect being gaining from the situation, is redeemed heavily nevertheless, while suddenly a competitor born 2 days…
— Paolo Ardoino 🍐 (@paoloardoino) August 3, 2023
Circle CEO Jeremy Allaire praised USDC’s openness and ease of trading, adding another voice to the complex debate on stablecoin dominance.
1/ The largest fintech in LATAM, @mercadopago, part of Mercado Libre, the Amazon of LATAM with 200M users, is rolling out support for USDC in key markets, starting with Chile. Momentum for USDC and digital dollars building around the world! https://t.co/3mNQxXvNUC
— Jeremy Allaire (@jerallaire) August 29, 2023
Read more: US Republicans accuse Fed of stifling stablecoin regulation