CBDC and stablecoins: problems with banks

CCData recently released the June 2023 Stablecoins & CBDCs report, a state of play of major fiat currency stablecoins and central bank digital currencies (CBDCs).

The picture that emerges is not particularly good.

The stablecoin market

The first data point to emerge is the continued decline in the stablecoin market.

In June, the total market cap of stablecoins actually fell by 0.57% to $128 billion (on June 19). This is the lowest stablecoin market cap since September 2021, after a whopping 15 consecutive months of decline.

At the same time, however, the dominance of stablecoins over the total crypto market cap has risen to 11.8%, so the underlying problem is not related to stablecoins.

In other words, it is the crypto market as a whole that is retreating from the November 2021 highs, with the market cap of stablecoins simply declining much less.

Despite this, the market cap of USDT (Tether) has reached a new all-time high, peaking at $83.5 billion in June.

But this was not enough to break the 15-month streak of declines in the overall capitalization of all stablecoins, as USDT is one of the few to rise. Moreover, USDT is only going up a little while other stablecoins are going down a lot.

In fact, USDT’s dominance of the stablecoin market rose from 64.3% in May to 64.6% in June.


A more indicative figure is that in terms of trading volumes.

CCData reveals that stablecoin exchange volume has fallen to an annual low, with a 10% drop in May, bringing it to $414 billion. This is the lowest monthly trading volume for centralized stablecoins since December 2022.

At the same time, centralized exchanges saw an increase in trading activity in June, which clearly shifted from stablecoins to real cryptocurrencies.

Not least because the dominance of fiat currencies has reached an all-time low in crypto markets.

Obviously, fiat currency trading volumes are much higher than in the early days, but as a percentage, fewer and fewer people are now using fiat currencies to trade cryptocurrencies.

The market share of fiat currency trading pairs in the crypto markets fell to 18.8% in June compared to stablecoin trading pairs, due in part to a 33.9% decline in fiat currency pairs trading volumes to $99.7 billion.

CBDCs and stablecoins: the problem of banks

This drop in the trading volume of fiat currency pairs in the crypto markets is said to be mainly due to problems with crypto exchanges with their banking partners, according to CCData.

Thus, it would be the banks themselves that would be responsible for the drop in fiat currency trading volume.

Moreover, banks are also behind some of the problems that stablecoins have faced in recent months.

It is worth noting that banks are not the only problem, and probably not even the main one, but it is curious that their actions are actually hurting fiat currencies and stablecoins in the crypto markets, in favor of real cryptocurrencies.

CBDCs: the comparison with stablecoins and the problem of banks

Frankly, while the report also covers CBDCs, it doesn’t say much about them. The most interesting part is definitely about stablecoins.

CBDCs only state that developments around the world continued in June, with Japan and Thailand joining the list of countries that have launched pilot programs for their respective central bank digital currencies.

However, the Bank of Thailand itself has stated that as of today there is no official plan to launch their own CBDC.

It also reveals that the team facilitating digital interactions between government departments, Symfoni Solutions, has announced the launch of a bridge that will connect Norway’s CBDC to Sweden’s CBDC and to the BROK government platform that uses blockchain technology to share information about the shares of unlisted companies.

The bridge has an ERC20 token linked to NOK on Arbitrum.


As such, it is possible that most of the attention is shifting to Bitcoin at this stage of the market.

With the end of the altseason, the decline in stablecoins market capitalization and fiat currency trading volumes, the focus has most likely shifted to actual cryptocurrencies.

For quite some time, almost none of the major crypto assets have been performing particularly well.

Only Bitcoin has gained momentum, so much so that it is possible to imagine there being a temporary phase where attention shifts from altcoins to Bitcoin.

Compared to 30 days ago, BTC’s market value has grown by 10%, which is more than the growth of all 20 major cryptocurrencies over the same period.

On the contrary, BNB is -22% from a month ago, ADA -20%, SOL -15% and MATIC -24%.

The problem is that the momentum of many altcoins has been up for months, in part because of the SEC’s attack on those crypto assets that are considered unregistered securities.

Bitcoin, on the other hand, is clearly considered a commodity and thus does not suffer.

In addition, Bitcoin is now more of a medium to long-term investment than a mere speculative asset, and this often makes it not particularly attractive in the short term.

Thus, the alt season in which interesting short-term transactions are possible thanks to the high volatility of altcoins seems to be over for now, while we have entered a phase where many prefer to focus on the medium to long term and on Bitcoin. .

However, this phase does not necessarily have to take a long time.

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