The landscape of stablecoins is undergoing a significant shift with the implementation of Europe’s Markets in Crypto-Assets Regulation (MiCA). According to French blockchain analytics firm Kaiko, non-compliant stablecoins currently dominate 88% of the total stablecoin volume. However, the tide is turning as market makers are beginning to favor compliant stablecoins over their non-compliant counterparts in light of the new regulatory framework.
Among the regulated stablecoins, Circle’s USDC has emerged as a frontrunner in meeting the growing demand for compliant alternatives. Kaiko’s latest report highlights USDC’s significant market share and trading volume growth, positioning it as a leader in the compliant stablecoin space. Prominent crypto exchanges such as Binance, Bitstamp, Kraken, and OKX have already delisted non-compliant stablecoins for their European customers, further solidifying USDC’s position.
Circle, the fintech firm behind USDC, recently achieved a significant milestone by obtaining an e-money license from France’s Autorite de Controle Prudentiel et de Resolution (ACPR). This licensing approval ensures that both USDC and Euro Coin (EURC) tokens are issued in full compliance with MiCA, making Circle the first global stablecoin issuer to meet the new regulatory standards in Europe.
CEXs Driving USDC Volume
Centralized exchanges (CEXs) have played a crucial role in boosting USDC volumes over the past year. Binance’s decision to re-list USDC in March 2023 led to a substantial increase in the stablecoin’s market share across all exchanges. Additionally, Bybit’s introduction of zero-fee USDC trading further contributed to the growing demand for USDC in the market.
Use Cases Driving Adoption
The rise in USDC’s demand can be attributed to its increasing use in settling perpetual futures contracts. The proportion of Bitcoin perpetual denominated in USDC has seen a significant growth on platforms such as Binance and Bybit. Similarly, the trade volume of ETH-USDC pairs for Ethereum perpetual contracts has also experienced a notable surge in recent months.
The demand for compliant stablecoins is on the rise, with USDC leading the trend as a trusted and regulated alternative in the market. As regulatory requirements continue to shape the stablecoin landscape, Circle’s compliance milestone and the growing adoption of USDC for various trading purposes signal a promising future for regulated stablecoins in the cryptocurrency ecosystem.
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