I was perusing the crypto markets today and noticed that Tether, the grandfather of all stablecoins, is approaching a $10bn market cap, making it the third most valuable crypto asset after Bitcoin and Ethereum.
I also noticed that USDC, the US Dollar stablecoin that Circle and our portfolio company Coinbase are behind, is approaching a $1bn market cap.
Unlike other crypto assets, the value of stablecoins, particularly “fiat backed” stablecoins, is not theoretical. These coins are backed by fiat deposits of people who have bought them. It is not entirely clear to me how fully reserved Tether is. But USDC is 100% backed by fiat. So that means that almost a billion USD has been paid for and set aside for USDC.
I’ve been spending a lot of USDC lately. I keep USDC at Coinbase and can spend it via the Coinbase mobile app. I’ve settled some golf bets with it, bought crypto with it, and am starting to use to buy crypto gaming assets.
I used to settle golf bets in Bitcoin. I have friends who claim they have tens of thousands of dollars in Bitcoin from golf bets I settled with them six or seven years ago. And we don’t play for a lot of money. So I don’t do that anymore. Settling in a USD backed stablecoin seems a lot more sensible. The same is true of most commerce and p2p payments applications.
I’m bullish on crypto as most readers know and I’m quite bullish on the stablecoin sector in crypto. I think their utility is just beginning to be understood in the west.