USDC Trading Volume Surges in July Amid New EU Regulations

Circle's USD Coin (USDC) experienced a significant boost in trading volume and market capitalization in July, largely influenced by new European digital asset regulations.

A report from CCData on July 31 revealed that USDC trading on centralized exchanges hit $135 billion by July 25, with its market cap increasing by 5.4% to $33.6 billion. This growth coincides with Circle becoming the first stablecoin issuer approved under the European Union’s new Markets in Crypto-Assets (MiCA) framework as of July 1.

In comparison, Tether (USDT) continued to grow, albeit at a slower pace, reaching a market cap of $114 billion with a 1.6% rise in July. Despite the slower growth, USDT maintains the largest share of the stablecoin market at nearly 70%, and Tether reported a record $5.2 billion profit for the first half of 2024.

Overall, the stablecoin market saw a 2.1% increase in capitalization, reaching $164 billion, the highest since April 2022. However, trading volume on centralized exchanges dropped by 8.4% to $795 billion by July 25, marking a fourth month of decline.

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Ahead of the new EU rules, several European exchanges delisted stablecoins. The regulations require issuers to be EU-based, notify authorities, and submit an approved white paper. Larger stablecoins face additional restrictions, including transaction caps and holding 60% of reserves in various banks. Tether CEO Paolo Ardoino highlighted the difficulty in finding European banks willing to handle stablecoin business.

Alexander Stefanov