Stable Coin is safer? USDT, USDC, BUSD BitCoin price Prediction – Review and Chart 2022
Stable Coin Price Prediction 2024
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The market values of stable Coin s have been increasing exponentially recently. Just two years ago (January 2020), all stableCoin s with a market cap of around $5 billion have a market value of over $150 billion today. This means an increase of about 30 times. In addition, the Circle company announced to its investors that USDC could be worth $ 194 billion in 2023. Tether company, on the other hand, was fined 41 million dollars by the US Commodity Futures Trading Commission and 18.5 million dollars by the New York State due to its illegal transactions recently. The questions of whether they are inspected or not and by which laws they are audited have started to be asked frequently lately. In this article, I will examine what assets the three stableCoin s with the highest market value (USDT, USDC and BUSD) are held in exchange for, and most importantly, with which laws they are regulated.
Source: Coin metrics
Independent of which investment instruments the assets held in exchange for stable Coin s are used we learn from the declaration reports (attestations reports) published by the organizations.
Therefore, since there is no standard, it is very difficult to make comparisons.
So what are the practices of companies regarding declaration reports?
Stable Coin At what intervals does it declare? Source USDT (Tether) Quarterly Company Report USDC (Circle) Monthly Company Report BUSD (Paxos) Monthly Company Report
As is appreciated, monthly reports, quarterly gives more confidence than any published reports. In addition, Circle, Paxos and Gemini (GUSD) have been publishing these reports regularly for years, while Tether published it for the first time in March last year. Later, we learned that Tether had in fact agreed on the lawsuit filed by the New York Attorney General’s Office and guaranteed that it would publish its quarterly statement report for two years. In other words, this practice was started not on his own will, but as a result of an agreement with the Attorney General’s Office.
So how much of the assets held in exchange for stable Coin s are in cash?
As it is known, cash and cash in order to protect a value in dollar terms equivalent assets are the safest investment instruments. Since stable Coin s are also already pegged to the dollar, they are expected to be held in the safest assets in dollar terms.
The riskiest bonds are corporate bonds, which vary according to their credit score. Well, let’s see how much of these three companies kept in cash or cash equivalents in the reports they published. Stable Coin Amount held in cash USDT (Tether) 3% USDC (Circle) ) 61% BUSD (Paxos) 96%
As can be seen in the table, Tether, which prints USDT, keeps only 3% of the asset in cash in exchange for stable Coin . In addition, according to the allegation in Bloomberg’s news on July 26, Tether bought short-term bonds of companies with high risk in China and made high-risk investments. It is possible to see it in the graph.
Which laws regulate stable Coin s?
There is no federal law regulating stable Coin s in the USA yet.
Although the content of the regulation is not yet known, SEC chairman Gary Gensler has repeatedly mentioned that there are attempts to give bank status to companies that issue stableCoin s. In fact, a few banks that accept this approach as an invitation in a way declared that they started initiatives to print stable Coin s called USDF a few weeks ago. PayPal company (PayPal Coin ) has announced that they are in a similar initiative.
So, what legal controls are the three stableCoin s we reviewed in this article currently subject to?
Stable Coin Regulatory Authority Auditor Scope USDT (Tether) Unknown Unknown USDC (Circle) 44 states where it has obtained the remittance license. Restrictions on choosing the assets in which money will be valued.
The imperative to choose safer assets. BUSD (Paxos) is subject to regular regulation by the New York State Department of Financial Services.
Obligation to keep assets in deposit accounts insured by the government.
Prevention of not investing in corporate bonds.
When we look at the audits they are legally subject to, it is seen that Paxos is subject to the strictest control.
I am only revealing the facts that I can see by doing research and sharing them with you. My biggest goal is to help you make your own decision within the scope of this data. I hope this detailed analysis has provided you with useful information on comparing stable Coin s.
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