In 2024, USDC transaction volume will soar to $23 billion.
The increase in regulatory hurdles increases the need for regulated stablecoins.
The cryptocurrency market has experienced increased regulation and scrutiny, with altcoins such as Ripple [XRP], Uniswap [UNI], and Monero [XMR] facing legal hurdles.
On the contrary, increased regulation has also increased global demand for compliant stablecoins such as USDC.
USDC’s trading volume surges to $23 billion in 2024, up from $9 billion in 2023. This exponential growth comes amidst increased demand for legally accepted stablecoins among major traders, making regulated stablecoins the perfect alternative.
As a result, recent developments have pushed USDC’s market share to an all-time high. According to Kaiko’s report, USDC’s market share is close to 14% of FDUSD.
So what is driving the surge in USDC? ? ? ? ?
As various market factors are driving USDC’s trading volume and market share, Kaiko said that the rise of centralized exchanges is the core factor driving the growth of USDC’s trading volume.
According to the report, USDC's market share on centralized exchanges has surged since March 2023, rising from 60% to 90%.
Likewise, perpetual futures settlement played a key role in the surge in trading volumes. Kaiko reported that USDC-denominated Bitcoin [BTC] perpetual contracts rose from 0.3% to 3.6%, while Ethereum [ETH] perpetual contracts rose to 6.8%.
The increased use of perpetual settlement suggests that investor sentiment toward overly regulated stablecoins is changing.
European MiCA compliance leads a new era in the stablecoin market
Recently, Circle announced that it has fully complied with the European MiCA regulatory requirements, becoming a model of compliance in the stablecoin market. Subsequently, Societe Generale Forge and others followed suit, indicating that the market is moving towards compliance.
MiCA compliance not only enhances the credibility of stablecoins, but also drives a surge in the trading volume of compliant stablecoins such as EURC and USDC. The participation of institutional investors further drives the market demand for compliant stablecoins.
Although unregulated stablecoins still account for a certain market share, the future prospects of regulated stablecoins are bright as major trading platforms restrict and delist these assets. Overall, MiCA compliance is reshaping the stablecoin market landscape and leading the industry to a healthier and more stable direction.
The future of regulated stablecoins appears bright as major exchanges such as Binance [BNB], OKX, Kraken, and Bitstamp continue to restrict and delist regulated stablecoins.
The above is only a personal opinion and does not constitute investment advice. The cryptocurrency market is risky, so think twice before investing!
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