MiCA Regulation Boosts Demand for Circle\'s USDC Stablecoin, But USDT Remains the Monthly On-Chain Transfer Volume Leader

The new requirements on stablecoin issuers applied by the European Markets in Crypto-assets Regulation (MiCA) are boosting the demand for Circle's USD Coin (USDC), according to on-chain analysis firm Kaiko.

Key Takeaways

As new requirements on stablecoin issuers imposed by the European Markets in Crypto-assets Regulation (MiCA) went into effect, on-chain data reveals a surging demand for Circle’s USD Coin (USDC).

The stablecoin's weekly trading volume soared to $23 billion in 2024, up from $9 billion in 2023 and $5 billion in 2022.

Circle recently announced its compliance with MiCA, which became effective on June 30 in Europe. The regulation sets standards for stablecoin issuers in whitepaper publication, governance, reserves management, and prudential practices.

Non-compliant stablecoins still account for 88% of the total stablecoin volume, but the market landscape is shifting.

Major crypto exchanges like Binance, Bitstamp, Kraken, and OKX have implemented restrictions, delisting non-compliant stablecoins for European customers.

This development has led to a record-high market share for USDC, approaching FDUSD's 14%.

Centralized exchanges (CEXs) played a significant role in this surge, with USDC's market share on CEXs rising from an average of 60% to over 90% across all exchanges after Binance re-listed it in March 2023.

The stablecoin's increased usage is also evident in perpetual futures settlement.

The share of Bitcoin perpetuals denominated in USDC on Binance and Bybit rose to 3.6% from 0.3% in January, while Ethereum/USDC trade volume increased to over 6.8% from 1% at the beginning of the year.

This trend suggests a growing preference for transparent and regulated stablecoin alternatives as new regulations come into effect.

However,Artemis, a on-chain data aggregator, reveals a plummeting USDC monthly on-chain transfer volume in June.

From a peak of $2.7 trillion in May, Circle’s stablecoin on-chain transfer volume dropped to $1.2 trillion the following month, while Tether USD (USDT) only lost less than $30 billion of its volume.

The above is the detailed content of MiCA Regulation Boosts Demand for Circle\'s USDC Stablecoin, But USDT Remains the Monthly On-Chain Transfer Volume Leader. For more information, please follow other related articles on the PHP Chinese website!