Circle’s stablecoin USDC has exceeded Tether’s USDT in transaction volume, with USDC recording $456 billion in transactions compared to USDT’s $89 billion. Despite this, Tether remains the dominant force in the stablecoin market, holding over 68% of market share. The surge in USDC transaction volume may be attributed to its use as a transaction currency within the US, while USDT is primarily held outside the US as a store of value.
The growth in USDC transaction volume follows a trend of increased adoption of stablecoins. Major companies like Stripe, PayPal, and Shopify have announced integrations or acceptance of stablecoin payments, signaling a shift towards mainstream use of these assets. Binance also converted its $1 billion Secure Asset Fund for Users into USDC stablecoin to ensure the fund’s reliability amidst market volatility. This growth in adoption indicates a positive outlook for USDC and other stablecoin assets.
USDC’s rise in transaction volume also comes after a setback in 2023 when US regulators categorized stablecoin issuers as banks, impacting the stablecoin’s marketability and causing a decline in transaction volume. However, USDC has rebounded from this setback with increased adoption in recent months. Analysts anticipate further growth in USDC usage as the regulatory environment for stablecoins becomes more solidified.
The data report released by Visa in partnership with Allium Labs did not specify the reasons behind the surge in USDC transaction volume. However, crypto analyst Noelle Acheson believes that USDC’s use within the US as a transaction currency contributes to its popularity, in contrast to USDT’s status as a dollar-based store of value primarily held outside the US. This distinction in use cases may be a factor in USDC’s recent success in transaction volume.
It’s worth noting that Tether’s USDT stablecoin still holds a significant market share and a market cap of over $100 billion. Despite USDC’s recent achievements, Tether remains a key player in the stablecoin market. However, the growing adoption of USDC and other stablecoin assets by major companies and platforms indicates a shift towards mainstream acceptance of these digital assets for transactions and payments.
Overall, the increase in USDC transaction volume, driven by factors such as mainstream adoption by major companies and a regulatory environment that is becoming more favorable to stablecoins, suggests a positive outlook for Circle’s stablecoin. The data suggests that USDC is gaining traction as a transaction currency within the US, leading to a significant increase in transaction volume compared to other stablecoins in the market.
