Tether’s stablecoin (USDT) market capitalization reached $81.5 billion on Thursday, its highest level since the Terra collapse in May 2022. The asset is now just $2 billion, shy of its all-time high of $83.4 billion, which it achieved on May 1 last year.

Tether’s market share reaches a two-year high of 63%

Since the beginning of 2023, the company has minted $15 billion in new USDT, coinciding with a nearly 15% increase in the stablecoin’s market share. This growth is partly due to the struggles faced by its closest competitors, Circle’s USD Coin (USDC) and Paxos-issued Binance USD (BUSD), which experienced a disproportionate number of their on-chain value redemptions for dollars after separate disputes. Tether’s market share now stands at 63%, the highest point in two years.

Over a billion USDT was minted on Thursday, though it has not yet entered circulation, as Tether CTO Paolo Ardoino shared in a tweet. While the new inventory is intended for Ethereum, the majority of USDT resides on the Tron blockchain, with approximately 45 billion tokens, as reported by Tether Limited’s transparency page.

PSA: 1B USDt inventory replenish on Ethereum Network. Note this is a authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps.

— Paolo Ardoino 🍐 (@paoloardoino) April 20, 2023

USDT issued on other blockchain networks, including Algorand, Avalanche, Bitcoin Cash’s Simple Ledger Protocol (SLP), EOS, Kusama, Liquid Network, Omni, Polygon, Tezos, Solana, and Statemine, make up only a small portion of the total supply.

House Financial Services subcommittee addresses Tether’s dominance and regulatory concerns

This week, Tether was among the topics discussed during a House Financial Services subcommittee hearing on stablecoins in Washington, D.C., where the main focus was on the absence of federal regulations for stablecoin issuers in the United States.

In response to a question from Rep. Warren Davidson (R-Ohio) about Tether’s dominance, witness Austin Campbell attributed it to the stablecoin’s “first mover advantage” and its status as an “entrenched incumbent.” Campbell, an adjunct assistant professor of business at Columbia Business School, also highlighted the benefits Tether enjoys by being based outside the United States, stating, “Tether has not faced the same kind of regulatory uncertainty.”

He added that the lack of transparency regarding Tether’s reserves puts users at risk but noted that Tether remains the default option when others face challenges, as there is demand for dollars on a blockchain.

Davidson described Tether as a “time bomb” and concluded that the real opportunity lies in creating legal clarity to facilitate stablecoin issuers’ operations within the United States.

Although Tether has not yet issued its quarterly attestation for Q1 2023, its continued growth in the stablecoin market highlights market participants’ confidence despite negative headlines and Congressional concerns. In a blog post, Tether referred to a report on the company as “outdated, inaccurate, and misleading” and maintained that it operates under substantial financial regulations.