The stablecoin market experienced a mixed bag in July, with Circle’s USDC emerging as a clear winner. A combination of market inflows and regulatory clarity in Europe propelled USDC’s trading volume to $135 billion, while its market capitalization climbed 5.4% to $33.6 billion, according to CCData.
This surge coincided with the implementation of the European Union’s Markets in Crypto-Assets (MiCA) regulatory framework. Circle was the first stablecoin issuer to secure regulatory approval under the new rules, solidifying its position in the European market.
Tether, while also experiencing growth, took a backseat to USDC. Its market capitalization increased by 1.6% to $114 billion, marking its 11th consecutive month of growth. Despite this, Tether maintained its dominance with a nearly 70% market share, according to DefiLlama. The stablecoin giant also reported record profits of $5.2 billion for the first half of 2024.
The overall stablecoin market capitalization increased by 2.1% to $164 billion in July, reaching its highest level since April 2022. However, trading volume on centralized exchanges contracted by 8.4% to $795 billion, marking the fourth consecutive monthly decline.
Also Read: USDT Hits $113.13 Billion Milestone – How Tether Became The Top Stablecoin Post-SVB Collapse
The EU’s MiCA regulations have significantly impacted the stablecoin landscape. Several crypto exchanges were forced to delist stablecoins before the June 30 deadline. Under the new rules, stablecoin issuers must be based in the EU, undergo regulatory approval, and adhere to stringent standards for large-scale stablecoins.
Tether CEO Paolo Ardoino has highlighted the challenges of complying with these regulations, particularly in securing banking partnerships. The limited number of banks willing to engage in such business has created hurdles for stablecoin issuers operating in Europe.
As the crypto industry navigates the evolving regulatory environment, the performance of USDC and Tether offers valuable insights into the market’s dynamics. While USDC has benefited from regulatory clarity, Tether’s dominance remains unchallenged.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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