Stablecoins have certainly been the talk of the town lately, especially after Circle Internet’s big splash on the New York Stock Exchange last week. It seems their Class A shares, which started at $31, have shot up an incredible 330.8%, giving the company a market value over $27 billion!
What’s the Fuss About Stablecoins?
You might be wondering, what exactly are stablecoins? Well, they’re a type of digital currency, or cryptocurrency, that’s designed to keep a steady value. Unlike popular cryptos like Bitcoin, whose prices can jump all over the place based on supply and demand, stablecoins are pegged one-to-one with a real-world asset. Think of it like this: one stablecoin could equal one U.S. dollar or a certain amount of gold, which helps them maintain a stable price.
And it looks like some of America’s biggest companies are taking notice. A recent report from The Wall Street Journal mentioned that retail giants Walmart and Amazon, along with online travel agency Expedia, have even been looking into creating their own stablecoins. It seems everyone wants a piece of the action!
Stablecoins by the Numbers
Just how big are stablecoins getting? Currently, there are over $250 billion worth of stablecoins circulating, and almost all of them (about 99%) are tied to the U.S. dollar. Most of these, around 86%, are what we call fiat-backed stablecoins, meaning they’re backed by traditional currencies like the dollar.
The largest stablecoin out there is Tether (USDT-USD), with a market cap of about $155.54 billion. While that’s a huge number, it’s still quite a bit smaller than Bitcoin (BTC-USD), the world’s largest cryptocurrency, which boasts a market cap of $2.08 trillion. All these fascinating figures come to us courtesy of CoinMarketCap.
The Regulatory Landscape for Stablecoins
You might also be curious about how stablecoins are regulated. Here in the U.S., there isn’t a specific regulatory framework for them just yet. However, Congress is definitely working on it! There’s the GENIUS Act that’s moving forward in the Senate, and the STABLE Act is pending in the House. Both of these acts aim to create a system for regulating stablecoins. If you’re interested in diving deeper, you can find the full text of the “Guiding and Establishing National Innovation for U.S. Stablecoins” (GENIUS) Act and the “Stablecoin Transparency and Accountability for a Better Ledger Economy” (STABLE) Act online.
Beyond Tether: Other Stablecoins and Crypto ETFs
While Tether is the biggest, it’s certainly not the only stablecoin around. You might also come across USDC-USD, PYUSD-USD, TUSD-USD, USDP-USD, BUSD-USD, and GUSD-USD.
And if you’re looking for ways to invest in the broader crypto space through more traditional avenues, there are several crypto-linked exchange-traded funds (ETFs) that might pique your interest, such as BITQ, DAPP, BKCH, BLOK, CRPT, and IBLC.