Stablecoin Tether (USDT) is gaining popularity as a payment method, with some analysts seeing it catching up with Bitcoin (BTC) and Ether (ETH).
As Bloomberg reported on Oct. 25, cryptocurrency payments processor CoinPayments registered the rapid increasing of popularity of Tether — a stablecoin pegged 1:1 to a United States dollar — as a means of payment. On the site, which has a 2.4 million user base, Tether currently accounts for 30% of volume, which is 30 times more than a year ago.
Tether undermines Ether’s leadership?
Bitcoin application as a means of payment has seen a nearly 60% drop in volume from 80% last year, according to CoinPayments, while Tether has pushed Ether out of second place. Users purportedly choose Tether due to the stablecoin’s capability to avoid price fluctuations. Sean Mackay, operations lead at CoinPayments.net, said:
“Merchants used to accept Bitcoin, Ethereum, Ripple and convert it into Tether in order to hedge against the volatility. Now we are seeing the payments just being done directly in Tether.”
Also, Tether has seen wider adoption among the types of merchants who have difficulty getting credit-card processing services or who are forced to pay high card processing fees.
Multimillion token mint and new offerings
In mid-September, Tether minted 300 million USDT as part of the swap from the Omni protocol to the Ethereum blockchain. However, no token burn on the Omni blockchain had taken place at the time. In July, Tether accidentally minted and subsequently burned 5 billion USDT tokens.
Also last month, Tether announced the launch of a new stablecoin tied to the offshore Chinese yuan dubbed CNHT. The new currency joins Tether’s other stablecoins backed by U.S. dollars (USDT) and euro (EURT).
As part of its further offerings expansion, Tether plans to release a version of the stablecoin backed by a basket of commodities such as gold, crude oil and rubber.