Circle’s USDC Emerges as Top Beneficiary of EU’s Push for Compliant Stablecoins

The MiCA regulation has created a growing demand for compatible stablecoins, with Circle’s USDC emerging as a major beneficiary of this trend.

In fact, USDC is driving demand for regulated stablecoins, according to French blockchain analytics firm Kaiko.

Increased demand for USDC after MiCA

In its latest release a reportKaiko revealed that non-compliant stablecoins currently account for 88% of total stablecoin volume. However, the European Markets in Crypto-Assets Regulation (MiCA) rules, implemented on June 30, are expected to change this dynamic, leading market makers to favor compliant stablecoins over non-compliant alternatives.

Over the past few months, prominent crypto exchanges like Binance, Bitstamp, Kraken, and OKX have already imposed restrictions, delisting non-compliant stablecoins, including Tether’s USDT, for their European clients.

Meanwhile, Kaiko noted that the share of compatible stablecoins has gained significant traction over the past year, indicating a growing appetite for more transparent and regulated alternatives, a trend that USDC has mostly benefited from.

According to Kaiko estimates, USDC has seen a significant increase in weekly trading volume, reaching $23 billion in 2024, up from $9 billion in 2023 and $5 billion in 2022. This growth has pushed USDC’s market share to an all-time high, approaching 14% for FDUSD.

Interestingly, last week, Circle, the fintech and company behind USDC, received an e-money license from the French Liquidity and Resolution Authority (ACPR), making it compliant with the stablecoin provisions under MiCA. With this, Circle became the first global stablecoin issuer to achieve compliance with the new regulatory framework in Europe.

The approval also noted that USDC and Euro Coin (EURC) tokens are now being issued in the EU in full compliance with MiCA.

Centralized Exchanges Support USDC Growth

It also found that centralized exchanges, or CEXs, were effective in boosting USDC volumes over the past year.

Following Binance’s decision to relist USDC in March 2023, the stablecoin’s market share on CEX jumped from an average of 60% to over 90% across all exchanges. Bybit’s introduction of zero-fee USDC trading in February 2023 also contributed to the surge in volumes.

The surge in demand for USDC can be attributed to its increasing use in settlement of perpetual futures contracts. The percentage of USDC-denominated Bitcoin perpetual on Binance and Bybit has risen from 0.3% to 3.6% since January. For Ethereum perpetual, the rise has been even more significant, with ETH-USDC trading volume growing from 1% to over 6.8% in the same period.