Terra USD’s market capitalization has increased from from $200 million to $9 billion in less than a year.
DAI’s lengthy reign as the largest decentralised stablecoin in terms of market capitalization has come to an abrupt end. UST, one of the Terra ecosystem’s stablecoins, is currently the biggest decentralised stablecoin by market cap, earning UST a spot among the top twenty crypto projects by market size.
UST achieved this milestone by dethroning its Ethereum-based competitor, DAI. According to available data, the market capitalization of UST stablecoin was around $200 million in the start of 2021. However, it exceeded $9 billion in December, a fivefold increase.
Apart from ranking top in its class, UST has also surpassed Ethereum to become the fourth-largest stablecoin by market value. It trails more prestigious centralised rivals like as USDT, USDC, and BUSD, which are backed by leading cryptocurrency companies such as Binance, Circle, and Bitfinex.
As an algorithmic stable currency, UST uses a Terra blockchain token to keep its peg to the US Dollar. The stablecoin industry is probably one of the fastest expanding segments of the crypto ecosystem this year. According to a study published by the Treasury Department, the market capitalization of the major stablecoin issuers has increased by 500 percent in the previous 12 months.
As a result of this exponential expansion, authorities worldwide, including those in Japan and the United States, have become more concerned and interested in the activities of these issuers. In the United States, authorities have proposed that only insured depository institutions be permitted to create stablecoins.
However, the crypto community takes a dim view of this approach, questioning why big stablecoin producers are not awarded bank charters.
Senator Elizabeth Warren has discussed how the astronomical rise of the stablecoin industry might have a devastating impact on the US economy.
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