Regulation
Kaiko says MiCA regulations have mostly benefited USDC
As Europe prepares for the implementation of MiCA regulations, data shows that demand for compliant stablecoins has primarily benefited one company.
Regulation of European cryptocurrency markets (Not), aimed at regulating the cryptocurrency market and specifically targeting stablecoins, has triggered a rush among issuers to comply. However, despite the apparent competition, only one stablecoin company has so far benefited from the stringent regulations: Circle.
According to data from French blockchain analytics firm Kaiko, Circle’s euro-pegged stablecoin (EURC) and its better-known USD Coin (USDC) have seen the most significant increases in daily trading volumes following the implementation of MiCA.
MiCA-compliant stablecoins | Source: Kaiko
Societe Generale, which also developed its own stablecoin called the Euro Convertible (EURCV), after raising its dubious restrictionshas also seen an increase in volume, Kaiko says, noting however that it has remained modest at $4,000, likely due to its availability exclusively on Bitstamp.
“[…] 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.”
Kaiko
Currently, non-compliant stablecoins dominate the market, “representing 88% of total stablecoin volume,” the Paris-based firm says, adding however that 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 started delisting non-compliant stablecoins for their European customers.
USDC Weekly Market Share by Volume | Source: Kaiko
In 2024, USDC weekly trading volume rose to $23 billion, up from $9 billion in 2023 and $5 billion in 2022, pushing USDC’s market share to a record high, which Kaiko attributes to its growing use on both decentralized exchanges (DEXs) and centralized exchanges (CEXs).
Another factor driving USDC’s growth is its growing use for perpetual futures settlement, the company says, noting that Bitcoin’s share (BTC) USDC-denominated perpetual bonds traded on Binance and Bybit rose to 3.6% from 0.3% in just six months. Additionally, USDC usage in Ethereum (ETH) perpetual cryptocurrency trading has also grown, with ETH-USDC trading volume rising to over 6.8% from 1% at the start of the year.
In early July, Circle announced that it had become the first stablecoin company to achieve compliance with MiCA policies. Meanwhile, speculation arose on the future of Tether in Europe after platforms like Bitstamp deleted its euro-denominated offering, Tether EURT. Also, European cryptocurrency trading platform Uphold ceased support for USDT and numerous other dollar-pegged stablecoins.