In July, the trading volume of USD Coin (USDC) saw a significant increase, largely fueled by market growth and the introduction of new European regulations.
According to a report by CCData on July 31, USDC trading volume on centralized exchanges reached $135 billion by July 25, marking a 48% surge from the previous month.
During the same period, its market capitalization rose by 5.4% to $33.6 billion.
This boost coincided with the European Union’s Markets in Crypto-Assets (MiCA) regulatory framework, which took effect on July 1.
Circle, the issuer of USDC, became the first stablecoin provider to receive regulatory approval under MiCA, positioning it favourably within the European market.
While USDC experienced substantial growth, Tether (USDT), the leading stablecoin, also saw an increase, albeit at a slower pace.
Tether’s market capitalization grew by 1.6% in July, reaching $114 billion.
Despite this slower growth, USDT maintains a dominant market share of nearly 70% and reported record profits of $5.2 billion for the first half of 2024.
The overall market capitalization of stablecoins rose by 2.1% in July, reaching $164 billion, the highest level since April 2022.
However, despite this growth, trading volume on centralized exchanges decreased by 8.4% to $795 billion, marking the fourth consecutive month of decline.
Ahead of the MiCA implementation, several European crypto exchanges delisted stablecoins to comply with the new rules.
These regulations require stablecoin issuers to be based in the EU, notify relevant authorities, and submit a white paper for approval.
Larger stablecoins are subject to additional restrictions, such as limits on daily transactions and maintaining 60% of reserves in cash deposits across multiple banks.
Tether CEO Paolo Ardoino highlighted the challenges, noting the difficulty in securing banking partners for such reserves in Europe.
