Regulation
MiCA regulations have mostly benefited USDC, says Kaiko
As Europe prepares for the implementation of MiCA regulations, demand for compliant stablecoins has primarily benefited one company, data shows.
Regulation of European crypto-asset markets (Mica), aimed at regulating the cryptocurrency market and specifically targeting stablecoins, has sparked a rush among issuers to comply. However, despite the apparent competition, only one stablecoin company has benefited from the strict regulation so far – Circle.
According to data from French blockchain analytics firm Kaiko, Circle’s euro-pegged stablecoin (EURC) and its better-known USD Coin (USDC) experienced the most significant increases in daily transaction volumes following the implementation of MiCA.
MiCA Compliant Stablecoins | Source: Kaiko
Société Générale, which has also developed its own stablecoin called Euro Convertible (EURCV), after raising its questionable restrictionsalso saw an increase in volume, Kaiko says, noting however that it remained modest at $4,000, likely due to its availability only on Bitstamp.
“[…] “The share of compliant stablecoins has increased over the past year, suggesting increased demand for transparency and regulated alternatives. So far, this trend has mostly benefited USDC.”
Kaiko
Currently, non-compliant stablecoins dominate the market, “accounting for 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 like 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 jumped to $23 billion, up from $9 billion in 2023 and $5 billion in 2022, pushing USDC market share to an all-time high, which Kaiko attributes to its increased usage on decentralized exchanges (DEXs) and centralized exchanges (CEXs).
Another factor driving USDC’s growth is its increased use for settling perpetual futures contracts, the firm says, noting that Bitcoin’s share (Bitcoin) USDC-denominated perpetuals traded on Binance and Bybit have increased from 0.3% to 3.6% in just six months. Additionally, the use of USDC in Ethereum (ETH) Perpetual swaps have also increased, with ETH-USDC trading volume increasing from 1% at the start of the year to over 6.8%.
In early July, Circle announced that it had become the first stablecoin company to comply with MiCA policies. Meanwhile, speculation appeared on the future of Tether in Europe after platforms like Bitstamp delisted its euro-denominated offering, Tether EURT. Additionally, European cryptocurrency trading platform Uphold ceased support for USDT and several other dollar-pegged stablecoins.