Binance Research Reveals Fiat-Backed Stablecoins Will Rule Cryptocurrency Market Adoption
The research arm of Binance has released the result of its recent Q1 study which some members of the cryptocurrency community may find rather disturbing.
The study shows that USD-backed stablecoins have especially attracted more attention than the base asset on the Binance exchange, Bitcoin. Cryptocurrency dominated pairs on the other hand are on a descent.
Specifically, the study showed that Bitcoin pairs lost 38% market share as its comparison 2018 and 2019 24 hour Quote Asset volume shows a growing preference for stablecoins on the exchange. Their Quote asset volumes market share has increased by 69% while Bitcoin pairs have lost 40% of its market share due to the “introduction of several stablecoin pairs with new quote assets and base assets,” according to Binance.
Tether USDT emerged as the the stablecoin with the largest net inflow of just under $1 billion while USDC became the biggest gainer in circulating supply amounting to nearly $60 million in January. GUSD however had no inflow at all in the first quarter of the year according to the report.
As the popularity of stablecoins rises, the study also suggests that non-financial institutions such as Facebook, Telegram and Samsung which are planning on entering the cryptocurrency industry may be potentially disruptive to the industry in the future as they have a sufficient number of followers to do so.
Also because of the controversies surrounding Tether, a greater price volatility is likely as well as a new blockchain formation as a result of Tron-Tether partnership which happened recently. Another coming partnership between Ontology and PAX is likely to encourage participation of individuals as well as institutions in the Ontology decentralized ecosystem as the partnership will be focused on in-Dapp usage, the research revealed.
As for Paxos, the partnership will separate it from other stablecoin issuers like Circle and TrustToken thus giving it a monopoly of the stablecoin market for dapps running on the Ontology blockchain.
According to details of the coming partnership between Paxos and Ontology, $100 million worth of PAX tokens are to be issued on the Ontology blockchain between May and June 2019 which will potentially attract many more exchanges.
Among other things, the study also reveals that the growing interest in fiat collateralized that are non-USD denominated and the proliferation of startups issuing the same will help the remittance industry by creating additional channels for global remittance. This will be a major improvement to the remittance industry which some projects such as Ripple are already on top of.