What happened: In a report analyzing data collected by Chainalysis on Tether’s recent trading volume, cryptocurrency research firm Diar highlights how China has been driving demand for the US dollar-pegged stablecoin, with more than $16 billion received by exchanges there in 2018. So far in 2019, Chinese exchanges have accounted for more than 60% of total Tether volume, up from 39% last year and significantly more than the 3% trading volume from the US.
Why it’s important: As noted by Cointelegraph, Diar’s analysis shows that Tether’s trading volume seems to be mostly legitimate, which is significant in light of reports that the vast majority of cryptocurrency trading volume is fake. Nevertheless, regulators outside of China will be wary of the country’s Tether volume share, since they will be unable implement any meaningful enforcement on exchanges based there. The record increase in Tether trading volume could be due to what Philippe Bekhazi, CEO of XBTO, a New York cryptocurrency trading firm, recently told Forbes is a “booming business in stablecoins because people are getting money out of China and Hong Kong” on fears of yuan volatility.