The market cap of Circle USDC stablecoin has surpassed $50 billion, continuing its rapid growth since last year. According to data from Defillama, USDC now has a circulating supply of $51 billion after seeing more than 11% growth in the past seven days.
The stablecoin’s explosive growth this year continues the positive trend of 2024 when it outperforms all its competitors, including Tether USDT, in market capitalization growth. per Circle Shaping the future of money reportthe circulating supply of USDC grew by 78% year over year in 2024.
Despite this growth, USDC is still below its all-time high market capitalization of $55.9 billion. From June 2022. However, a steady increase in supply means it is back to challenging Tether USDT after the struggles of 2023.
USDC was one of the main casualties of the 2023 banking collapse when Circle faced challenges withdrawing some of its USDC reserves from the Silicon Valley bank. This incident caused the USDC to briefly depeg from the US dollar, leading to widespread selling by many currency holders who had chosen USDT.
Interestingly, USDT also recorded almost 50% growth in its market capitalization, rising from $91.7 billion to $137.5 billion between 2023 and 2024. The leading stablecoin has seen its market capitalization grow by more than 550% since 2020, while USDC recorded more than 1,100%. growth.
Interconnection issues, regulatory clarity and other factors drive the growth of USDC
Meanwhile, the resurgence of USDC has already diminished the dominance of the USDT stablecoin. according to DevillamaUSDT currently dominates the market with a share of 64.88%. While this is still significant, it is down significantly from its 70% dominance a few months ago.
Many factors have contributed to USDC’s growth over the past year, but regulatory clarity is inevitable major Driving force. With the US now having a pro-crypto president, Donald Trump, there is a strong feeling that cryptocurrencies will see some regulatory clarity, and stablecoins are likely to be one of the first sub-sectors to be regulated.
USDC, which is based in the US, appears to have some advantages over USDT on this front, with many preferring it for this reason. Its more regulated feature makes it attractive in regions with stablecoin regulations.
For example, Circle has become a stablecoin issuer that has been licensed under the Markets in Cryptoassets (MiCA) regulation in the European Union. Tether USDT is at risk of exiting the European market due to its inability to comply with MiCA.
As for USDT, concerns about its regulatory compliance have increased in recent months, prompting some of its major partners to consider the possibility of abandoning it. For example, Coinbase CEO Brian Armstrong said the exchange could delist USDT if stablecoin law required it.
Binance, the world’s largest cryptocurrency exchange, has also teamed up with Circle to increase USDC use cases on the exchange through more trading pairs and other promotions. Many stakeholders in the cryptocurrency market believed that the partnership was intended to challenge Tether’s dominance.
Meanwhile, Tether has also faced renewed scrutiny over its reserves, with multiple on X questioning whether it has enough backing for USDT. This has caused the circulating supply of USDT to decline slightly over the past month, leaving the stablecoin slightly off its peg.
However, both Tether and Circle continue to expand their products. Tether recently launched its USDTO service on Kraken’s Ink Network and has diversified its services with a focus on commodities and artificial intelligence. For its part, Circle also acquired Hashnote and USYC Tokenized Money Market Fund while partnering with trading firm DRW.
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