XRP has surpassed Tether's USDT to become the third-largest digital asset with a market capitalization of $138.98 billion as of January 3. According to a post by CoinGecko on X, XRP is now only behind BTC and ETH. The shift in the hierarchy occurred after Tether's market capitalization dropped by $1.6 billion since December 30, coinciding with the enforcement of the European Union's Markets in Crypto-Assets (MiCA) regulation.

Market Dynamics and Price Performance

XRP reached a market capitalization of nearly $141 billion, driven by a 17% price increase over the past 14 days. At the time of writing, XRP is trading at $2.43, up 280% from last year. Recent assumptions surrounding a potential XRP spot ETF and the launch of Ripple's dollar-backed stablecoin, RLUSD, have contributed to its upward trajectory.

The price increase occurred after the U.S. elections on November 5, leading to expectations of fair policies under the new administration. Additionally, Ripple Labs launched RLUSD on December 17, with plans to integrate this stablecoin into Ripple Payments in early 2025. RLUSD currently has a market capitalization of $72 million, according to CoinGecko.

The Impact of MiCA Regulations on Stablecoins

The decline in Tether's market share is related to the implementation of MiCA, which imposes stricter requirements on stablecoin issuers operating in the European Union. These regulations require full reserves and licensing for stablecoin operations. Coinbase Europe delisted USDT in December, citing non-compliance with MiCA requirements.

Despite the decline, Tether remains the top stablecoin, accounting for 67.21% of the $204 billion stablecoin market. USDT continues to see the most activity on the Tron blockchain, making up 53.8% of its user base.

In December, Tether added 21.9 million new users, increasing its user base by 11.7%. Meanwhile, USDC saw a 24% increase in new addresses, with 5.7 million addresses created during the same period. The most active blockchain for USDC remains Solana, followed by Ethereum layer-2 Base.

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