The UST of Terra (LUNA) overtakes the DAI to become the 4th capitalization of stablecoins

The capitalization of the stablecoin TerraUSD (UST) now higher than that of the DAI

The two stablecoins had been following each other for several weeks. Finally, the explosion of the course of Terra (LUNA) will have gave the UST the advantage over MakerDAO’s DAI. TerraUSD thus becomes the 4th capitalization for the stablecoin market alone.

Replicating the US dollar, the UST is now capitalized at over $ 9 billion, against a little less for his rival. These figures are interesting and show the growing progression of the juicy stablecoin market.

Created a little over a year ago, the TerraUSD has therefore quickly made a place in the stablecoin war by quickly monopolizing the summits. By comparison, the UST’s capitalization remains very far from the two leaders, respectively Tether’s USDT (75-77 billion) and Circle’s USDT (41-43 billion).

However, the podium remains achievable in the medium term, since Binance USD is capitalized to the tune of $ 14.5 billion. In view of the explosion in the price of LUNA, the native token of the Terra blockchain, this does not seem impossible.

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The decentralization of the UST of Terra, an advantage over other stablecoins?

While Terra’s UST is equivalent to one dollar, it works very differently from the USDT and the USDC. It is indeed closer to the DAI since it is also guaranteed by other cryptocurrencies chosen by an algorithm.

In other words, Terra’s UST is a decentralized stablecoin, unlike those of Tether Limited and Circle, which are centralized. Thus, it is much more difficult to block the issuance of UST since it would mean blocking all of the underlying digital assets.

USDT and USDC are secured by real dollars and negotiable debt instruments. It is so easier to limit or even prohibit the issuance of these two stablecoins, for example by taking sanctions against the two issuing companies.

To date it is hard to say if decentralization will win out over centralization in the open war between stablecoins. Investors so far seem to trust both types, each with its own advantages and disadvantages.

The only certainty is the ultra-dominance of stablecoins replicating the dollar rate American. If some initiatives have appeared in recent months, euro stablecoins or another fiat currency are indeed conspicuous by their virtual absence in comparison with dollar stablecoins.

? To read – Bitstamp will list a stablecoin backed by the euro: the EURt of Tether

Stablecoins are in the sights of the US authorities

In 2021, stablecoins have become one of the thorniest issues in the hands of financial regulators. In the United States, the Securities and Exchange Commission (SEC) has been designated as the regulatory authority for these particular cryptocurrencies.

It is particularly the setbacks of Tether that made the news. The USDT issuing company has indeed been accused of lying about its guarantees. In other words, 1 USDT would not be guaranteed by 1 dollar. Which turned out to be reality.

His rival Circle then hastened to show white paw by being transparent on its guarantees, which has earned it to remain (for the moment) out of the sights of the American financial authorities. It remains to be seen whether these legal setbacks will give decentralization the advantage over centralization.

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