TLDR
- Circle’s USDC stablecoin market cap has increased 72% from $43 billion in January to $74 billion as of today.
- Tether’s USDT grew only 32% during the same period, according to JPMorgan analysts.
- USDC’s transparent reserve management and regular audits attract institutional investors and regulated entities.
- The Markets in Crypto-Assets regulation in Europe accelerated the divergence between USDC and USDT velocity.
- MiCA regulation came into effect in July 2024, boosting USDC’s onchain activity.
Circle’s USDC stablecoin exhibits faster growth than Tether’s USDT in terms of market capitalization and onchain activity. JPMorgan analysts attribute this expansion to regulatory clarity and rising institutional adoption. The USDC stablecoin has gained substantial ground in recent months.
Circle’s USDC Gains Favor Amid Regulatory Shift
The USDC stablecoin market cap has increased from $43 billion in January to $74 billion as of today. This represents a 72% rise, surpassing USDT’s 32% growth during the same timeframe. Managing director Nikolaos Panigirtzoglou led the JPMorgan analysts who published these findings on Wednesday.
The market shift favors stablecoins that emphasize transparency, compliance, and regulatory assurance. Circle’s USDC stablecoin benefits from transparent reserve management and regular audits. Financial institutions view the USDC stablecoin as more trustworthy than competitors.
The analysts stated that USDC’s compliance with Markets in Crypto-Assets regulation distinguishes it from rivals. MiCA regulation in Europe came into effect in July 2024. This framework makes the USDC stablecoin the preferred choice for regulated entities.
MiCA Regulation Accelerates USDC Velocity
The implementation of the MiCA regulation accelerated the divergence in stablecoin velocity between USDC and USDT. Stablecoin velocity measures onchain transfer volume relative to market capitalization. The USDC stablecoin velocity has trended upward since the regulation took effect.
The Genius Act in the U.S. provided an extra boost to USDC’s onchain activity last summer. USDT has not received MiCA authorization from European regulators. Major exchanges delisted USDT following the rollout of the regulation.
The USDC stablecoin gained momentum through integrations with Visa, Mastercard, and Stripe. These payment networks enable onchain settlements and merchant payments. Circle’s Cross-Chain Transfer Protocol allows the secure transfer of USDC between blockchains.
USDC Growth Spans Multiple Blockchains
The USDC stablecoin operates on blockchains such as Solana and Base. These networks have experienced an increase in decentralized finance activity. CCTP eliminates reliance on custodial bridges for cross-chain transfers.
Tether’s USDT maintains dominance outside the U.S. as the primary trading pair. Emerging markets continue to favor USDT for exchange trading. USDT shows higher trading velocity on centralized exchanges in these regions.
The analysts noted USDT’s higher ratio implies greater utilization for exchange trading outside America. However, USDC’s compliance model could threaten USDT’s current dominance. The USDC stablecoin may set the standard for future stablecoin development globally.
Tether plans to launch USAT by the end of this year. This new stablecoin will comply fully with the Genius Act in the U.S. JPMorgan analysts previously stated that USAT and other fintech-issued stablecoins will intensify competition.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
