Kaiko says MiCA regulations mostly benefited USDC

As Europe prepares to implement MiCA regulations, demand for compliant stablecoins has mainly benefited one company, data shows.

Europe’s Markets in Crypto-Assets Regulation (MiCA), which aims to regulate the cryptocurrency market and specifically target stablecoins, has created a compliance frenzy among issuers. However, despite the obvious competition, only one stablecoin company has so far benefited from the strict regulations—Circle.

According to data from French blockchain analytics firm Kaiko, the company’s European-linked stablecoin Circle (EURC) and its more well-known USD Coin (USDC) saw the largest increases in daily trading volumes following the implementation of MiCA.

Société Générale, which also developed its own stablecoin called Euro Convertible (EURCV), also saw volume increase after questionable restrictions were lifted, Kaiko said, noting, however, that it remained at a moderate $4,000 level, likely due to its exclusive availability on the Bitstamp platform.

“(…) the share of compliant stablecoins has increased over the past year, suggesting an increased demand for transparency and regulated alternatives. This trend has mostly benefited USDC so far.”

Kaiko

Currently, non-compliant stablecoins dominate the market, “accounting for 88% of total stablecoin volume,” the Paris-based firm says, adding that MiCA “could change this balance as exchanges and market makers prefer compliant stablecoins over non-compliant alternatives.”

Major cryptocurrency exchanges such as Binance, Bitstamp, Kraken, and OKX have already started delisting non-compliant stablecoins for their European customers.

In 2024, USDC’s weekly trading volume increased to $23 billion, from $9 billion in 2023 and $5 billion in 2022, pushing USDC’s market share to a record high. Kaiko attributes this to increased usage on both decentralized exchanges (DEXs) and centralized exchanges (CEXs).

Another factor driving USDC growth is increased use for futures settlement, the firm says, noting that the share of USDC-denominated Bitcoin (BTC) futures contracts traded on Binance and Bybit has increased to 3.6% from 0.3% in just six months. Additionally, USDC use in Ethereum (ETH) futures trading has also increased, with ETH-USDC trading volume increasing to over 6.8% from 1% at the start of the year.

In early July, Circle announced that it had become the first stablecoin company to achieve MiCA compliance. In the meantime, speculation has been rife about Tether’s future in Europe after platforms like Bitstamp delisted its euro-denominated offering, Tether EURT. Additionally, European crypto trading platform Uphold has discontinued support for USDT and several other dollar-pegged stablecoins.