Crypto traders are likely to lean more toward dollar-pegged stablecoins, after Silvergate Capital Corp., and its crypto-friendly lending affiliate, said last...
Crypto traders are likely to lean more toward dollar-pegged stablecoins, after Silvergate Capital Corp., and its crypto-friendly lending affiliate, said last week it was at risk of “being less than well-capitalized” and discontinued its crypto-payments network.
USD Tether USDTUSD , the world’s largest stablecoin by market capitalization, saw its trading volume against bitcoin hit an record high last week, in comparison with the bitcoin-USD trading pair, according to research firm Kaiko. Banks have traditionally been reluctant to work with digital asset companies due to the lack of regulation, industry participants said. Stablecoins can be used to convert fiat currencies, like dollars DXY , into crypto assets. However, like other parts of the crypto complex, stablecoin issuers may prove unreliable, including because they can be lightly regulated or unregulated.
Several crypto companies, including Coinbase Global Inc. COIN , Galaxy Digital, Paxos and Circle, said last week that they would cease all or part of payment transactions with the bank.“With the death of SEN, stablecoins will likely become even more ubiquitous among traders,” analysts at Kaiko wrote in a Monday report. “Rather than deposit your dollars with an exchange, you deposit them with a stablecoin issuer, receive stablecoins, and then transfer those to an exchange.
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