Stablecoin Surge: Circle Rises, Tether Hits Records

• Circle’s USD Coin saw a significant volume increase to $135 billion by July 25, thanks to new EU regulations and market influx
• Tether achieved a record 11 consecutive monthly market cap increases, reaching $114 billion, with Q1 2024 profits hitting $5.2 billion
• New EU rules are reshaping the stablecoin market, with Circle becoming the first stablecoin issuer approved under the new framework and exchanges delisting stablecoins ahead of implementation

July saw a big jump in trading volume for Circle’s stablecoin, USD Coin, reaching $135 billion. This growth was driven by new EU regulations that approved Circle as the first stablecoin issuer under the MiCA framework. 

Tether also grew, reaching a $114 billion market cap, but it had to deal with some challenges as new rules led some European exchanges to delist stablecoins.

USD Coin Surges with New EU Rules; Tether Hits Record Profit

In July, Circle’s stablecoin trading volume took off thanks to increased market inflows and new European digital asset regulations. CCData reported on July 31 that USD Coin trading on centralized exchanges reached $135 billion by July 25, with its market cap growing by 5.4% to $33.6 billion.

With the EU’s Markets in Crypto-Assets (MiCA) framework now live, Circle became the first stablecoin issuer approved by European regulators on July 1.

Meanwhile, Tether saw slower growth but still set a record with 11 straight months of rising market cap, reaching $114 billion.

Tether’s market cap saw a 1.6% increase in July. DefiLlama reports that USDT has the largest market share of any stablecoin, at nearly 70%. Tether also reported record profits of $5.2 billion for the first half of 2024 on July 31.

Stablecoin market cap saw a 2.1% increase in July, reaching $164 billion—the highest since April 2022. However, centralized exchange trading volume dropped 8.4% to $795 billion by July 25, marking the fourth consecutive month of decline.

EU Exchanges Delist Stablecoins

On June 30, a bunch of crypto exchanges in Europe took down their stablecoin offerings to get ready for new regulations. The new rules say that stablecoin issuers (asset-referenced, ART, and e-money tokens, EMT) have to be based in the EU, let the relevant authorities know, and submit a white paper for approval.

 It looks like large stablecoins might have to comply with stricter regulations, including daily transaction limits and a requirement to deposit 60% of reserves in liquidity with various banks.

Paolo Ardoino, Tether’s CEO, said in an interview back in May that there are very few banks in Europe that are willing to handle this type of business. It’s actually quite challenging to find one!

Conclusion

In a nutshell, the stablecoin market has seen some impressive growth recently, with USD Coin and Tether leading the way despite some regulatory hurdles along the way.

With market caps on the rise and new European regulations in the mix, the stablecoin sector is abuzz and could see more changes in the coming months.