Circle’s (CRCL) USDC overtakes USDT in onchain activity as regulation drives shift: jpmorgan
Circle Internet’s (CRCL) USDC has overtaken USDT in Onchain activity, Wall Street Bank JPMorgan (JPM) said, as investors and institutions moved to adopt StableCoins that recognized emerging regulatory standards.
The bank noted that USDC’s market capitalization advanced 72% this year to $74 billion, outstripping USDT’s 32% increase. That reflects a shift toward properties with greater transparency and compliance, it said. USDT remains the largest stableCoin, with a market cap more than double that of second-ranked USDC.
Wednesday’s report attributes the difference to regulatory clarity, especially European markets in the Crypto-Assets framework (MICA), which takes place in mid-2024.
StableCoins are cryptocurrencies whose value is tied to another asset, such as the US dollar or gold. They play a major role in the cryptocurrency markets, providing the payment infrastructure, and are also used to transfer money around the world.
USDT’s lack of MICA authorization led to its withdrawal from several European exchanges, while compliance with USDC regulation, transparent reserves and regular audits strengthened its appeal to institutional users, analysts led by Nikolaos Panigirtzoglou wrote.
USDC’s on-chain speed has also climbed, fueled by growth in Solana and base, two blockchain-driven decentralized finance (Defi) activity, and by combining with the giants visa (v), MasterCard (MA) and Stripe, analysts said.
Partnerships with e-commerce and Web3 platforms and Circle’s cross-chain transfer protocol have further enhanced its efficiency for payments and settlements.
While USDT remains dominant in emerging markets as the leading trading pair on exchanges, JPMorgan said the regulated USDC model could set the global standard for StableCoin development, challenging Tether’s long-held lead.
Read more: Investment bank Mizuho says visa is becoming the ‘stablecoin of stablecoins’
