The total value of stablecoins in the cryptocurrency space is now above $20 billion as demand for cryptocurrencies pegged 1:1 with national fiat currencies – mainly the U.S. dollar – keeps on growing.

According to data from Coin Metrics, the total value of stablecoins surpassed $20 billion this Thursday, September 24, little over four months after surpassing $10 billion back in May.

Demand for stablecoins may be on the rise because of the recent yield farming trend on the decentralized finance (DeFi) space, as farmers can collect rewards in platform governance tokens for lending and borrowing funds within them.

Adding the governance token rewards to the APY from lending funds can lead to APYs above 100%. To combat volatility, some use stablecoins to earn interest, so they only have to worry about the value of the governance tokens they receive.

Speaking to CoinDesk John Tadaro, director of institutional research at cryptocurrency analysis firm TradeBlock, pointed out that a recent downward price trend for most cryptocurrencies may be driving demand as well.

Because some exchanges do not offer fiat pairs, stablecoins are the only available option for traders to move risk off into fiat-like assets during periods of volatility.

Stablecoins are viewed by some traders as an intermediary step to enter the cryptocurrency space. Indeed, data from crypto data site Glassnode shows that the balance on exchange for the most popular stablecoin by market capitalization, Tether’s USDT, hit an all-time high in April.

As CryptoGlobe reported, the market cap of USDT surpassed $15 billion this month after growing by $3 billion since August. Tadaro added that stablecoins are being used to ““bypass capital controls and other enforcements in order to move USD-like assets around.”

Featured image via Pixabay.