Company
Date Published
Author
Team Circle
Word count
1172
Language
English
Hacker News points
None

Summary

In the global crypto over-the-counter (OTC) trading market, digital dollar stablecoins like USD Coin (USDC) play a crucial role by providing a fast, cost-effective, and transparent means for executing large trades privately with minimal price slippage. Institutional investors prefer OTC trading desks for their discretion and lack of order size limits, in contrast to standard crypto exchanges where large trades can significantly impact price. USDC, as a fully reserve-backed stablecoin, is utilized as trading capital, a base currency for pricing, and a counterparty settlement instrument, offering near-instantaneous and low-cost transactions. This has led to its growing adoption among professional traders seeking greater liquidity and confidentiality. With North America and Asia leading in vibrant crypto OTC markets, the use of USDC facilitates seamless cross-border transactions, reducing reliance on traditional banking systems. As the market evolves, the number of brokers and exchanges offering OTC services has increased, catering to diverse market participants such as hedge funds, family offices, and high-net-worth individuals. Despite challenges like price volatility, the advantages of OTC trading, including reduced counterparty risk and enhanced liquidity, make it a preferred choice for large institutions.