Regulation
Circle’s USDC Drives Demand for Regulated Stablecoins, According to Analytics Firm Kaiko
USDCThe flagship product of Boston-based payments firm Circle is currently seeing the highest demand of all regulated stablecoins, says cryptocurrency intelligence firm Kaiko.
In a new relationshipKaiko says that following Circle announcement that its USDC and EURC products would now be compliant with the European Markets Regulation for Cryptocurrencies (MiCA), both stablecoins saw strong increases in volume.
While “non-compliant” stablecoins continue to dominate the markets, Kaiko says regulated products have seen an increase in volume over the past year, likely driven by a push for transparency.
“Currently, non-compliant stablecoins dominate the market, accounting for 88% of total stablecoin volume. MiCA could shift this balance as exchanges and market makers favor compliant stablecoins over non-compliant alternatives. Major cryptocurrency exchanges such as Binance, Bitstamp, Kraken, and OKX have already implemented restrictions, delisting non-compliant stablecoins for their European customers.
On the other hand, the share of compliant stablecoins has increased over the past year, suggesting greater demand for transparency and regulated alternatives. So far, this trend has primarily benefited USDC.”
Source: Kaiko
Kaiko also points out that another factor contributing to USDC’s growth is the fact that its use for perpetual futures settlement is increasing sharply, although it is still tiny compared to Tether’s USDT.
“Another contributing factor to this trend is the growing use of USDC for perpetual futures settlement. The share of USDC-denominated perpetual BTC traded on Binance and Bybit has risen to 3.6% from 0.3% in January.
USDC usage in ETH perpetual trading has been even higher, with ETH-USDC trading volume increasing to over 6.8% from 1% at the start of the year. While USDC’s market share in these perpetual markets is only a fraction of USDT’s, its growing usage for perpetual settlement is a testament to the changing preferences of investors as stablecoin regulations take effect.”
Source: Kaiko
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