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stablecoin market

Stablecoin Market Reaches New Low, But USDT and DAI Shine

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In the realm of stablecoins, September marked significant cryptocurrency market developments. One prominent trend was the 18th consecutive month of declining stablecoin market capitalization, dropping to a new low of US$123.8 billion, reminiscent of September 2021. Despite this decline, USDT and DAI managed to buck the trend, exhibiting slight increases in their market capitalization.

Despite occasional turbulence from events like the FTX asset liquidation announcement and the Federal Open Market Committee (FOMC) meeting, the crypto market as a whole has displayed resilience, quickly recovering and regaining stability. The standout moment of the month was Telegram’s integration of the TON wallet, sparking a significant rally in the TON coin’s value.

One of the most promising narratives is the adoption of account abstraction (“AA”), marked by over 2.3 million successful ERC-4377 smart account transactions across more than 870,000 unique AA accounts. Ethereum’s Layer-2 solutions (“L2s”) have played a pivotal role in this growth, with Polygon, Optimism, and Arbitrum accounting for the majority of transactions. These L2s are essential in addressing Ethereum’s scalability challenges.

Stablecoin Resilience Amid Gas Fee Dominance

Uniswap’s insatiable appetite for gas fees continues, maintaining its top spot in Ethereum gas consumption over the last 30 days. L2s have also seen a surge in activity, emphasizing their role in enhancing blockchain scalability. zkSync Era’s mainnet recorded over 30.58 million transactions in 30 days, surpassing Ethereum itself. Arbitrum’s relaunch of the Arbitrum Odyssey campaign has also contributed to its growing usage and popularity.

In the DeFi sector, September witnessed a reshuffling of the market composition. ApolloX emerged as a formidable player, boasting a remarkable 450% month-on-month growth in trading volume market share. This shift underscores the evolving landscape, where newcomers like ApolloX challenge the dominance of established protocols such as dYdX and GMX.

In conclusion, September presented a mixed bag of developments in the cryptocurrency space. Stablecoins faced prolonged decline, while select coins like USDT and DAI demonstrated resilience. The market remained relatively stable, with occasional disturbances quickly absorbed. Layer-2 solutions and account abstraction are on the rise, addressing scalability issues, and DeFi dynamics continue to evolve with the emergence of new players like ApolloX. Crypto enthusiasts and investors will undoubtedly keep a close eye on these trends as the market continues to evolve.

Bank of England Governor Has Specific Plans for Emerging Stablecoin Market, Claims that the Industry Needs Overwatch

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Financial regulators across the planet have been doing everything in their power to bring cryptocurrencies and virtual assets under their mandate. Ever since the inception of Bitcoin and the altcoin industry, many traditional bodies have been convinced that the rules might need to be amended to accommodate the latest technology.

The latest traditional body to make a statement on the virtual assets industry was the Bank of England, which specifically stated that it needed to stay a step or two ahead of the emerging stablecoin market. This comment was made by the newly appointed BoE Governor Andrew Bailey who took charge of the post in March of this year.

The stablecoin market is still perceived as an emerging market despite the rise of major tokens like Tether. These tokens are linked with the US dollar which makes their prices much more ‘stable’ than the rest of the pack. Stablecoins shot into the limelight when Facebook announced its own called Libra coin. This disrupted the already controversial market with policymakers convinced that they had to do something about it.

Coming back to the Bank of England Governor, he claimed that the traditional market heads should ensure proper coverage of the cryptocurrency market. In his words:

“If stablecoins are to be widely used as a means of payment, they must have equivalent standards to those that are in place today for other forms of payment types and the forms of money transferred through them. If a sterling retail stablecoin wishes to operate at scale in the UK, then we will strongly consider the need for an entity to be incorporated in the UK.”

The United Kingdom has made some radical changes over the past couple of years to strengthen its financial ecosystem and protect it from anything that may hurt its integrity. Apart from this, the country has also asked the G20 nations to adopt stringent standards to watch over the cryptocurrency industry. This was a point reiterated by Andrew Bailey who claimed that existing regulatory standards must be examined and updated where necessary in light of stablecoins.