Binance Research, the research wing of the largest and most reputed cryptocurrency exchange in the world claims in its recent study that Tether (USDT) takes the top place on the list of institutional usage, despite the tokens ongoing backing irregularities
While the foremost cryptocurrency Bitcoin is on a high ride, with its recent price surge, it is Tether that takes the center stage when it comes to institutional investors. Binance Research questioned institutional and VIP clients in May 2019 in order to understand their thought process over the usage, or lack thereof, on the stablecoin market.
USDT has managed to spark a trend in its market capitalization, even though the stablecoin is surrounded by a slew of controversies. Notably, the said controversies do not hinder the interest of institutional investors that USDT is receiving.
Before we go ahead to list the findings of the study, it is important to note that amidst the clients who participated in the poll, 90 % stated that they employ USD as their “benchmark currency.” Thus giving USD denominated stablecoins and USD-denominated platforms a natural edge.
Stablecoin Usage in percentage across Institutional and VIP ClientsSource: Binance Research
As per the report, “nearly all” of the participants use stablecoins either as a store of value, USD in digital form or as a means of trading, given the number of crypto-stablecoin trading pairs that are in the market. The report further dubbs, USDT as the “go-to stablecoin,” stating that the stablecoin is incorporated in operations of over 80 percent of the clients queried.
The next in line was USD Coin [USDC], a stablecoin spearheaded by Coinbase and Circle, given the big-name backing the stablecoin is used by 45 percent of the respondents. Further, the report adds that on one hand, USDC found significant usage with their non-Chinese base and on the other, the Chinese clients of Binance flocked towards Paxos Standard [PAX], that takes the third place in the survey with 25% of the usage.
The report further inferred that some clients were thinking of switching out of USDT and into other stablecoins that offer similar liquidity:
“However, a few clients indicated that they were currently looking for alternatives for USD Tether (USDT) with similar liquidity profiles.”
The fifth position on the list was awarded to Maker’s DAI, the cryptocurrency collateralised stablecoin operated on the Ethereum blockchain. The stablecoin is being used in one-fifth of the institutional clients’ operations.
In the past, USDT has been accused of “fractional banking,” due to its alleged skewed one-for-one backing with the USD. In addition, the convoluted Bitfinex-iFinex-Tether matrix further complicates the situation as New York Attorney General’s office accused Bitfinex and of fraud by the for covering up an $850 million undisclosed loss using Tether.
Interestingly, the USD-denominated stablecoin market will purportedly recieve stiff competition from other fiat-backed digital assets. Earlier in the month Binance announced their plan to launch a Great British Pound [GBP] backed native-stablecoin within a few months.
Read more:Firm Behind Zcash Plans To Introduce New Version With Sharding
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