Circle’s USDC stablecoin has dethroned Tether’s USDT as the leader in transaction volume for 2024, according to data compiled by Visa Inc. in collaboration with Allium Labs. This significant development indicates a potential shift in how users interact with stablecoins.
Despite USDT retaining a larger share of coins in circulation (68% vs. USDC’s 20%), USDC has processed a significantly higher volume of transactions this year. Visa’s data reveals that USDC has captured a staggering 50% of all stablecoin transactions since January, compared to USDT’s $89 billion.
Source: Visa/Allium
Industry analysts suggest this trend reflects the evolving use cases for stablecoins. Noelle Acheson, a prominent cryptocurrency researcher, posited that USDT might be preferred for storing value internationally, while USDC’s deeper integration with established payment networks makes it more suitable for domestic transactions within the United States.
Stablecoins, cryptocurrencies pegged to a fiat currency (often the US dollar), are a cornerstone of the cryptocurrency ecosystem. They offer price stability compared to other crypto assets, facilitating smoother movement of funds and payments.
USDC’s rise followed a period of turbulence in 2023. The banking crisis caused a significant drop in USDC’s circulation, plummeting from a peak of $56 billion to $23 billion by December revealing a $3.3 billion exposure to Silicon Valley Bank. However, USDC has since exhibited remarkable resilience, rebounding to $32.8 billion.
The stablecoin market saw a resurgence, with its total market cap approaching a record high of $188 billion. According to IntoTheBlock, as of October 2023, the stablecoin market cap had risen to $160 billion. This upward trend was significant, as stablecoins played a vital role in the broader cryptocurrency ecosystem, especially in decentralized finance (DeFi).
The data suggests a maturing stablecoin market where USDC is establishing itself as a powerhouse in transaction volume. While USDT maintains a strong presence in global circulation, USDC’s seamless integration with traditional finance might be a key factor driving its future growth.
