Circle’s USDC emerges as greatest beneficiary of EU compliant stablecoin push

MiCA rules have elevated demand for compliant stablecoins, with Circle’s USDC rising as a significant beneficiary of this development.

In reality, USDC is main the demand for regulated stablecoins, in keeping with French blockchain analytics agency Kaiko.

USDC Demand Will increase After MiCA

Newest reportKaiko revealed that at the moment, non-compliant stablecoins account for 88% of the full stablecoin quantity, however with the European Markets in Crypto Belongings Regulation (MiCA) coming into pressure on June 30, this development is predicted to alter and market makers will seemingly favor compliant stablecoins over non-compliant ones.

Over the previous few months, outstanding cryptocurrency exchanges akin to Binance, Bitstamp, Kraken and OKX have already imposed restrictions and delisted non-compliant stablecoins, together with Tether’s USDT, to their European prospects.

In the meantime, Kaiko famous that the share of regulation-compliant stablecoins has elevated considerably over the previous yr, signaling rising demand for extra clear and controlled options, a development that has primarily benefited USDC.

Kaiko estimates that USDC’s weekly buying and selling quantity is predicted to develop dramatically, reaching $23 billion in 2024, up from $9 billion in 2023 and $5 billion in 2022. This progress has propelled USDC’s market share to an all-time excessive, approaching FDUSD’s 14%.

Apparently, final week, Circle, the fintech firm behind USDC, was granted an e-money license by the French Autorité de Stabilité de Recherche (ACPR), making it compliant with MiCA’s stablecoin provisions, making Circle the primary international stablecoin issuer to adjust to Europe’s new regulatory framework.

This approval additionally signifies that each USDC and Eurocoin (EURC) tokens can now be issued within the EU in full compliance with MiCA.

Centralized Exchanges Drive USDC Progress

The examine additionally discovered that centralized exchanges (CEXs) have contributed to the expansion of USDC buying and selling volumes over the previous yr.

Following Binance’s resolution to relist USDC in March 2023, the market share of stablecoins on CEXs has soared from a mean of 60% to over 90% throughout all exchanges. Bybit’s introduction of fee-free USDC buying and selling in February 2023 additionally contributed to the rise in buying and selling volumes.

The elevated demand for USDC is pushed by its rising use within the settlement of perpetual futures contracts. The proportion of Bitcoin perpetuals denominated in USDC on Binance and Bybit has elevated from 0.3% to three.6% since January. For Ethereum perpetuals, the rise has been much more pronounced, with ETH-USDC buying and selling quantity rising from 1% to over 6.8% over the identical interval.