USD Coin (USDC), a digital dollar stablecoin by Coinbase and Circle, has seen its market cap exceeding USD 1 billion on Thursday in just 21 months after launch.
Centre Consortium, the issuer of USDC, announced the news on Thursday, July 2. According to Centre Consortium, this achievement has marked USDC the fastest-growing digital dollar stablecoin to cross this $ 1 billion threshold. Only one stablecoin, Tether, had been able to top that market capitalization.
According to other sources, the $1 billion market cap mark follows a USDC supply surge in June when its total jumped 37% from 730,920,001 to 1,002,228,740, which represents a 93% increase from the beginning of the year.
Centre Consortium said that the world had witnessed the explosion of the decentralized finance (DeFi) ecosystem in 2019, which led to increased demand for USDC. In 2020, multiple factors are driving continued rapid growth.
According to the blog post, the financial crises by COVID-19 has resulted in currency volatility across many developing economies. This market volatility encouraged some traders to park assets in stablecoins. This scenario resulted in increased demand for fast, global, secure, and inexpensive digital dollars like USDC and USDT.
Centre Consortium further said:
“Secondly, businesses around the world are beginning to seek the advantages of payments made via an entirely new, digital, global, and interoperable infrastructure that enables low-cost transfers anywhere nearly instantly.”
The recent innovation in the governance of the Compound protocol is also a contributing factor to USDC growth.
USDC is a fully collateralized US dollar stablecoin issued by the Centre Consortium, an organization co-founded by Circle and Coinbase. Currently, USD Coin is listed on more than 60 globally operating crypto exchanges. It is the second stablecoin to reach a $1 billion market cap after Tether.
According to CoinMarketCap, USDC is ranked at number 18th with a market cap of USD 1,016,619,632 at the time of writing. The total supply is 9,479,177,442 USDT. Despite this rapid growth, USDC is still far behind Tether (USDT), which, at the time of writing, has a market cap of USD 9,237,557,681, approximately 10 times greater than USDC. Also, Tether has experienced a 144% growth in 2020 as compared to USDC, which increased by 93%.
Crypto exchange Coinbase also invests USDC to other platforms to spur DeFi development. As reported, Coinbase invested 1.1 Million USDC in Uniswap and PoolTogether via the USDC Bootstrap Fund— Coinbase initiative to support developers building DeFi protocols.
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