There is a new stablecoin in town, and an old player's stock is facing the heat. A stablecoin is an integral part of the DeFi infrastructure. It is a cryptocurrency designed to hold a steady
There is a new stablecoin in town, and an old player's stock is facing the heat.
A stablecoin is an integral part of the DeFi infrastructure. It is a cryptocurrency designed to hold a steady value by pegging to an asset like the dollar, typically backed by reserves such as cash and Treasuries.
In the current market, two stablecoins, namely USDT by Tether and USDC by Circle, hold the top positions by market capitalization. Of the two, only USDC is issued by a publicly listed company, Circle (NYSE: CRCL).
But Circle's stock saw a massive drop intraday as a new stablecoin was introduced by a group of 140 firms.
Related: Stablecoin adoption accelerates as businesses embrace real-time transactions
More than 140 companies, including Visa, Mastercard, and BlackRock, have thrown their weight behind Open USD, a new stablecoin built to tackle the stubborn cost and access barriers in global payments.
Circle's key backer, Coinbase, is also a part of the coalition.
As announced on June 30, Open Standard, the firm behind the token, pitched Open USD as a more open, lower-cost alternative to today's stablecoins.
The alliance spans payment giants, global banks, technology companies, and crypto-native players such as Aptos Labs, Solana, Ripple, and Coinbase.
The news of a new stablecoin in town pulled Circle's stock by more than 16% intraday. At press time, it was trading near $63.52.
CRCL stock drops intradayYahoo Finance
Moreover, the stock has dropped over 43% in the past month while its year-to-date (YTD) returns also clocked more than 19% drop, as per Yahoo Finance.
Circle's USDC is the second-largest stablecoin with a market cap of $73.45 billion and is currently behind Tether's USDT, whose market cap stands at $184.7 billion.
Related: Coinbase buys stake in Circle as USDC pursues stablecoin market share
