An analysis by crypto market data provider Kaiko revealed that USD Coin (USDC) is currently the most liquid stablecoin on centralized exchanges (CEXs), with approximately $38 million bids preventing a .1% price deviation of the asset.
USDC’s liquidity is followed by that of Tether (USDT), Binance USD (BUSD), True USD (TUSD), and Dai (DAI). The data compiled by Kaiko includes the .1% bid-side depth across all markets that use USDC as a base asset.
USDC – the Most Liquid on CEXs
Kaiko noted that while stablecoin issuers like Circle and Tether ensure their tokens maintain their parity, de-pegging could still occur on spot markets. This has made stablecoin spot markets essential for price discovery.
“Theoretically, stablecoin issuers maintain their peg. However, de-pegging can still happen on spot markets, especially considering #USDT redemptions start at $100k. Stablecoin spot markets are thus extremely important for price discovery. This data aggregates .1% bid-side market depth across all markets that include the stablecoin as a base asset,” Kaiko said.
The latest development is significant for USDC, as USDT has always been in the lead. At the start of the year, USDC and DAI had very little usage on CEXs. They were mostly traded within the decentralized finance (DeFi) ecosystem, according to Kaiko.
Toward the end of Q1 2023, a potential U.S. banking crisis caused USDC to lose its dollar parity and fall 13% to levels below $0.88. However, the stablecoin has stabilized and is striving to remain in the $1 price range, per data from CoinMarketCap.
Coinbase Increases USDC Rewards to 4%
USDC’s dominance on CEXs can be attributed to crypto exchange Coinbase raising the rewards with the asset to 4%. The trading platform announced in a June 15 tweet that it is increasing its incentive for USDC holders from 2% to 4%, a move aimed at luring more users and boosting its position in the market.
Meanwhile, USDT, now the second most liquid stablecoin on centralized exchanges with approximately $26 million bids, traded below the $1 price range during the week. The asset was worth $0.99 at writing time, per data from CoinMarketCap, due to the ongoing Curve-Aave loan saga.
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