Tether, the parent company of the popular stablecoin USDT, is making inroads into the African, European, and Middle Eastern markets in the face of its legal issues in the United States. USDT has been quite active in the market, with its supply rising to $120 billion. However, there are still speculations surrounding its legal status again.
According to on-chain data, Tether’s stablecoin has experienced increased usage in the European, African, and Middle Eastern markets. Although the asset is making headlines across Eastern and Northern Europe, its on-chain activity reveals a different regional pattern.
Tether’s estimate shows that about 330 million wallets have their stablecoin in them, with most of its usage located in developing nations. The firm has also revealed that it is looking into rolling out cheaper chains to increase its adoption in the countries.
Tether’s stablecoin is the most used USD alternative
Chainalysis revealed that the stablecoin has enjoyed increased usage, especially during the day in Rwanda, Turkey, Russia, and Iran. These countries are outside the global West and have a high adoption rate.
Also, USDT has slowly replaced assets like BTC and ETH due to its fixed price. According to the report, the biggest issues of the stablecoin are terrorism financing and usage for scam activities.
The recent activity tracked by Chainalysis is coming after new interest in the stablecoin’s parent company, Tether. The company refuted claims that the United States was investigating its activities, with the news causing USDT to slide below its $1 peg a little.
Tether also revealed its conservative investments are adequate during the release of its quarterly report. The company recorded excess reserves of $6 billion, with the remaining USDT backed by investments like Treasury bills, gold, and some RWA tokens. The bull market has also aided its rise, growing it to one of the sought-after assets for settlement.
One notable aspect of the data information will depend on the blockchain being looked at, which could mean limited activity. Also, USDT wallets are not limited to a region as they can be accessed anywhere. DeFi and DEX activity are also not bound to specific times as users may use bots to carry out trades.
There has been a long-standing suspicion of countries and traders using USDT to bypass sanctions. USDT on the TRON blockchain has recorded the most transactions, with authorities tying some of it to attempts to break capital control laws. While Ethereum carries most transfers, USDT transactions on TRON are about 87%.
USDT based on the Ethereum blockchain is mostly used on DeFi and exchanges. While both chains are permissionless and available worldwide, Ethereum remains the go-to option regarding liquidity and adoption.
USDT has also enjoyed rich usage on the Toncoin chain, with most of its activities tied to trades in Eastern Europe. Meanwhile, not all uses of USDT are illegal with Toncoin USDT added to the Mobee payment app.
USDT remains a centralized exchange token
USDT still has uses in the decentralized sector including DEX swaps. It is also used as a tool for direct payment with a typical example being the Telegram marketplace, DeFi marketplace, and other fintech apps.
In centralized uses, USDT helps in the provision of liquidity as well as moving funds from one exchange to another. It is also used to swap different cryptocurrencies and fiat currencies. The active pair against USDT is the dollar, with the Won and euro the other active ones.
Its activity against the fiat shows that it is the key driver of dollarization in the crypto market, with most assets quoted against the dollar or USDT.
USDT is still available on exchanges including Binance, but it has been phased out of some products in Europe. With 2024 drawing to a close, we could witness stricter European regulation, signaling the reduction of official payment gateways.
For some legal purposes, USDC has enjoyed better usage than USDT. USDC is also becoming a major multi-chain asset. Over the past month, USDC leapfrogged USDT in supply growth seeing an increase of over 900 million tokens. In the same period, USDC’s supply has grown by over 700 million tokens.