Circle Emerges as Major Beneficiary of MiCA Stablecoin Regulations

• MiCA boosts Circle’s stablecoins, EURC and USDC, in Europe.
• USDC’s weekly trading volume soars to $23B in 2024.
• USDC use rises in perpetual futures, especially for BTC and ETH.

The recent implementation of the Markets in Crypto-Assets Regulation (MiCA) in Europe has primarily bolstered one player in the stablecoin market—Circle. Circle has emerged distinctly ahead, particularly with its Euro-pegged EURC and the more prominent USD Coin (USDC). According to a recent analysis by French blockchain analytics firm Kaiko, these two stablecoins have seen the most substantial upticks in daily trading volumes post-MiCA implementation.

The trading volume of USD Coin (USDC) has reached unprecedented heights, with a record-breaking surge to $23 billion in weekly trading volume in 2024, marking a significant jump from $9 billion in 2023 and just $5 billion in 2022. This meteoric rise has positioned USDC close to rival FDUSD, with a nearly 14% market share in the stablecoin sector.

Centralized exchanges (CEXs) have been pivotal in catalyzing this growth, particularly following the re-listing of USDC by Binance in March 2023. The relisting has driven USDC’s market share on CEXs from an average of 60% to over 90% across all platforms. Additionally, Bybit has contributed to this surge by promoting zero-fee trading for USDC since February 2023, further fueling its adoption.

The adoption of USDC is not just limited to traditional trading but extends to the derivatives market as well. There has been a noticeable increase in the use of USDC for settling perpetual futures, especially on prominent platforms like Binance and Bybit. Data reveals that the share of Bitcoin (BTC) perpetuals denominated in USDC has escalated to 3.6% from a mere 0.3% in January. Even more striking is the growth in Ethereum (ETH) perpetuals, where USDC-denominated trades have skyrocketed to 6.8% from 1% at the start of the year.

These trends show a broader shift in investor preference towards stablecoins that comply with emerging regulations, such as those proposed in the Markets in Crypto-Assets Regulation (MiCA) framework in Europe. Although USDC still trails behind Tether (USDT) in overall market share within perpetual markets, its growing usage for perpetual settlements highlights its rising prominence and acceptance among traders seeking regulatory compliance and stability in the volatile crypto market.