Circle Turns To Cash Reserves To Battle PayPal And Tether For Stablecoin Supremacy

Circle Internet Financial (CRYPTO: USDC) is relying on its substantial cash reserve of more than $1 billion to navigate the increasing challenges posed by non-crypto entities such as PayPal Holdings Inc (CRYPTO: PUSD) The company wants to reverse the dwindling market share of its stablecoin, which ranks second in the market. Since the start of the year, the circulation of Circle's USD Coin has sharply decreased from $45 billion to approximately $26 billion, and in contrast, Tether, the leading stablecoin, has seen growth in the same timeframe.

Timeline of , Tether

Tether CTO Paolo Ardoino says that PayPal's newly launched stablecoin PYUSD could hurt USDT‘s US competition. In a new interview with Benzinga, Ardoino says that he doesn't view PYUSD as competition for Tether, but rather, he views it as a challenge for competitors like Circle's USD Coin (USDC).

PayPal and Paxos dominated the news cycle on Monday with the announcement of the launch of the PayPal (PYUSD) stablecoin, but concerns have been raised about the possibility of user assets being frozen in their wallets, as is the case with USDT. Crypto Community Adverse to Paxos Wallet Freeze Feature The PYUSD stablecoin issued by Paxos has a condition that is not too welcomed by the crypto community, which has dulled the initial excitement for the launch of the PayPal stablecoin.

Paolo Ardoino, CTO of Tether (USDT), said in an Aug. 8 statement shared with CryptoSlate that he welcomed PayPal's entrance into the stablecoin industry. Ardoino said PayPal's foray into the field would enhance the overall growth of the ecosystem as it would drive competing firms to develop solutions that would further boost adoption and innovation.

Mike Novogratz, founder and CEO of Galaxy Digital Holdings Ltd., has expressed optimism regarding the return of traditional institutional investors to the cryptocurrency market, especially in the aftermath of last year's upheaval in the digital-asset world.

Justin Sun, the prominent cryptocurrency entrepreneur and founder of the Tron blockchain, has taken a significant step by withdrawing 200 million USDT (Tether) from his decentralized finance platform, JustLend. In a notable move, the funds have been deposited into the Asia-based crypto exchange, Huobi.

Tron Network founder Justin Sun may have moved a huge amount of the Tether stablecoin into the Huobi exchange. Furthermore, the exchange has been embroiled in rumors regarding insolvency as liquidity dries up.

A notable transaction involving the wallet address linked to blockchain entrepreneur Justin Sun (TT2T17KZhoDu47i2E4FWxfG79zdkEWkU9N) has stirred attention in the cryptocurrency community.

U.S district court in New York ruled in favor of the stablecoin issuer in the legal battle. The filing stated that Tether was not liable for any injury allegations as per the plaintiff's claim because USDT did not suffer loss of value.

Tether, a trailblazing stablecoin issuer, has recently reported an impressive profit of $850 million for the second quarter of the year. This announcement comes amid Tether's significant exposure to US Treasuries, with the company revealing a staggering $72 billion holding in these government bonds.

A class action lawsuit filed against cryptocurrency firms Tether and Bitfinex was dismissed Friday by a federal judge in New York. The judge ruled the complaint lacked plausible claims of injury and failed to show that Tether's stablecoin USDT had diminished in value.