Sun. Aug 14th, 2022

The co-founder and CEO of cryptocurrency startup, Circle, has revealed that there has been an unexpected boost in demand for stablecoins from businesses as the coronavirus pandemic affects the global economy.

USDC Records Increase In Demand

Circle, a cryptocurrency startup that switched to stablecoins four months ago, has seen an unprecedented surge in demand for its USDC coin, according to the co-founder and CEO Jeremy Allaire.

According to Allaire, there has been an increase in demand for US-backed stablecoins from businesses around the world. He claimed that the current requests are for day-to-day business transactions, rather than just to move money quickly between cryptocurrency exchanges.

Allaire stated that over the past several weeks, Circle has seen an increased interest and growth in USDC. He also stated that it is evident that there is a significant global demand for digital dollars and using these digital dollars as a new payment medium. The USDC is the stablecoin Circle issues in partnership with a world-class cryptocurrency exchange, Coinbase.

He added that new companies using their stablecoin are from e-commerce marketplaces, advertising networks, luxury goods producers, and recruiting platforms. Others also include mobile banking providers, digital content markets, professional services firms, peer-to-peer lending platforms, payment companies, software firms, rewards businesses, and other internet companies, he added.

The feedback from the Asian marketplace is that there is a rising demand for USDC from SMEs (small and medium enterprises) who seek both the safety and utility of digital dollars. Circle saw the number of Circle Business Accounts surge by 700% over the past few weeks. The Circle Business Account was introduced last month for corporate entities to carry out their business using the USDC coin. Interestingly, more than 60% of the companies using the stablecoin came from outside the cryptocurrency space.

USDC Market Cap Up By 65 Percent

The statements made by Allaire were verified by Circle’s data obtained from CoinMetrics. According to CoinMetrics, the market cap of the stablecoin is up by 65%, from $444 million on March 1 to $734 million on April 17.

From Allaire’s explanation, the current COVID-19 crisis is causing a rapid mainstream adoption of blockchain technology. USDC, as a stablecoin, is designed to hold its value and not be volatile, unlike Bitcoin and the majority of other cryptocurrencies. The USDC coin is backed by real-world dollars held in a bank, which can easily be redeemed on demand.

Allaire stated that he believes we are seeing a real turning point in the adoption of cryptocurrencies at the moment. The US dollar, whether the digital or fiat, has been in hot demand over the past few weeks as investors look to safe-haven assets for protection against the economic effects of COVID-19.

“We’re seeing record amounts of transaction volume,” Allaire added. He further stated that adoption is relatively evenly distributed across Western and Asian markets.

USDC is not the only stablecoin that has been experiencing a surge in demand over the past few weeks. Paxos Standard (PAX) has seen its market cap grow by 22% from $198 million to $258 million; tether (USDT) is up 36% from $4.6 billion to $6.3 billion, and the Gemini dollar (GUSD) surged from $3.9 million to $6.2 million, or up 6%. The biggest winner so far is the Binance dollar (BUSD) issued with Paxos, which grew from $68 million to nearly $200 million, or up an astonishing 194%.

With most of these stablecoins issued on the Ethereum blockchain, the network is at almost the same value as the blockchain network at the moment.

By Dov Herman

Dov is a Blockchain and Forex trading enthusiast, who spends most of his time trading and examining software who are related to cryptocurrencies and forex trading. You can follow on Dov’s reviews and articles here on TrustedBrokerz and across the web.