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According to the cryptocurrency reporting website CoinMarketCap, the total supply of USD Coin (USDC) has jumped to $79.2 billion at press time, representing an increase of around $4 billion since the US-Israel war on Iran began.
The second-largest stablecoin by market capitalization’s recent flurry of activity is reportedly not because of a sudden surge in demand from crypto users. It is rather attributed to the capital flight from the United Arab Emirates (UAE), whose reputation has been hit hard by the ongoing crisis in the Persian Gulf.
Capital Flight from the UAE
According to a tweet from Dubai-based analyst Rami Al-Hashimi, the sudden increase in demand for USDC is due to it facilitating a market of panicked investors in the UAE.
He claimed:
Image Source: XAccording to Hashimi, bank wires are taking 5-7 days, while the real estate market is down as much as 27%. Huge discounts have opened up for crypto payments, and as a result, more USDC is being pumped into the Emirati market to meet liquidity requirements.
While some of the analyst’s claims appear exaggerated, there is some truth to them, as the UAE real estate market is down 10-15% amid investor panic, with no end to the war in sight. Some are liquidating/selling their assets at a discount and paying hundreds of thousands of dollars to flee via Oman. There is also a lot of excess Gold flooding the Gulf countries’ market, and the precious metal is also being sold at a discount. All of these variables point to increasing adoption of stablecoins like USDC.
USDC Overtakes USDt in Transaction Volume
Japanese investment bank Mizuho reported that the USDC has generated about $2.2 trillion in adjusted transaction volume so far this year, significantly higher than USDT’s roughly $1.3 trillion over the same period.
According to Mizuho, USDC is reportedly winning the race in transaction volume, as their analysts say the stablecoin with the most activity will become the public’s number one choice, not the one with the largest market capitalization alone.
The Future of Stablecoins
While stablecoins continue to increase their market penetration, the US has yet to finalize a mechanism to regulate their yield capability with the CLARITY Act.
Many legacy economists and banking institutions believe that these digital dollar coins will mark the end of the banking sector.
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Source: https://zycrypto.com/usdc-supply-soars-close-to-80-billion-but-it-has-not-much-to-do-with-crypto/
