USDC Sees Surge in Demand Amid Increasing Crypto Regulation Compliance

• The demand for Circle’s regulated stablecoins, including USDC, is on the rise, according to crypto market intelligence firm Kaiko.
• Following their compliance with the European Markets in Crypto-assets Regulation (MiCA), Circle’s USDC and EURC stablecoins have experienced a notable increase in trading volume.
• “Non-compliant” stablecoins still dominate the market, but the push for transparency is giving compliant options like USDC more traction.

USDC is seeing a surge in demand and volume, attributed to its compliance with European regulations and an increasing preference for transparent, regulated stablecoin options.

USDC’s Growing Popularity in the Regulated Stablecoin Market

Kaiko’s recent report highlights the growing interest in USDC, Circle’s flagship stablecoin, particularly following its compliance with MiCA. USDC has shown significant growth in volume, reflecting a market shift towards regulated stablecoins. With major crypto exchanges like Binance and Kraken delisting non-compliant stablecoins for European customers, the preference for regulated options is becoming more evident.

The Impact of MiCA Compliance on Stablecoin Preferences

The introduction of MiCA has influenced the market dynamics significantly. While non-compliant stablecoins still hold the majority, accounting for 88% of total stablecoin volume, regulated stablecoins like USDC are seeing an uptick in demand. This trend suggests a growing preference for transparency and regulatory compliance among investors and market participants.

USDC’s Role in Perpetual Futures Markets

A key factor driving USDC’s growth is its increased usage in perpetual futures settlements. Kaiko’s data reveals that USDC’s share in BTC perpetuals on platforms like Binance and Bybit has surged from 0.3% to 3.6% since January, indicating a notable shift. Similarly, the ETH-USDC trade volume has risen significantly, showing a stronger preference for USDC in these markets.

Comparing USDC and USDT in Perpetual Markets

Despite USDT’s dominance, USDC’s growing market share in perpetual futures signifies changing investor preferences. While USDT still leads in total market share, the rising usage of USDC, particularly for ETH and BTC perpetuals, highlights the increasing importance of regulatory compliance in trader decision-making.

Conclusion

The evolving regulatory landscape, particularly in Europe, is fostering a shift towards transparent and regulated stablecoins like USDC. As market dynamics continue to evolve, USDC’s compliance with MiCA and its rising role in perpetual futures settlement underscore the growing investor appetite for regulated, transparent options in the crypto space.