Stablecoins have experienced a meteoric rise in popularity during the second half of 2018, with currencies such as TrueUSD, USDC, Paxos, and GUSD experiencing a 1032 percent increase in on-chain transactions took place in November vs. September 2018, Diar reported on December 10, 2018.
Fiat-Backed Stablecoins Start Gaining On-Chain Traction
It seems that stablecoins are on their way to become an indispensable part of the crypto space despite the incredibly hostile market. Aiming to solve the problems traditional cryptocurrencies have made worse, such as volatility and liquidity, stablecoins have become one of the most talked about topics in the industry.
While the popularity of these fiat-backed coins was usually attributed to the press they got, recent reports have shown that their adoption is much bigger than anticipated.
According to a December 10 report from Diar, a whopping 1032 percent increase in on-chain transactions took place in November in contrast to September, breaching the $2.3 billion mark at the close of last month. The research compared data from September to November 2018 and recorded on-chain transaction rates of stablecoins including TrueUSD, USDC, Paxos and GUSD.
The report found that the Paxos Standard, the stablecoin from the Paxos Trust Company, was responsible for $1.8 billion on-chain transactions on the Ethereum blockchain in just three months. The relatively young stablecoin has twice as more transactions than USDC, the Coinbase and Circle-backed stablecoin released by the CENTER consortium, which was among the most popular fiat-backed coins on the market.
To date, all four major stablecoins, USDC, TUSD, GUSD, and PAX, have breached the $5 billion mark in on-chain transactions since September, Diar reported.
Tether No Longer the Dominant Force Among Stablecoins
The influx of stablecoins the cryptocurrency market has experienced in 2018 could be attributed to increased concerns about Tether. Tether, the company behind the first and, at one point, the most widely used stablecoin on the market, has been accused of market manipulation. The company was also widely criticized about the lack of transparency it provided about their dollar reserves, raising questions about its ability to back all of the coins it has issued.
Other stablecoins saw their chance in the midst of the controversy and started popping up during the second half of 2018. Major industry players such as the Coinbase and Gemini exchanges introduced their own stablecoins, increasing adoption rates for stablecoins across the crypto community.
This has caused other large exchanges to start listing stablecoins, with both Bitfinex and Ethfinex adding GUSD, PAX, USDC, and TUSD pairs to their platforms.