Circle's USDC Stablecoin Stages a Notable Comeback in 2024, Riding a Wave of Regulatory Clarity and Market Demand

According to Circle's third annual "State of the USDC Economy Report," USDC's circulating supply grew by 78% year-over-year in 2024, a notable comeback after the token's market cap plunged by nearly 45% in 2023.

Despite being the largest stablecoin by market value, Tether (USDT) saw a slower growth rate in 2024 compared to its main competitor, USD Coin (USDC). According to Circle’s “State of the USDC Economy Report,” USDT’s total market value increased by around 50% over the year, rising from USD 91.7 billion at the end of 2023 to reach approximately USD 137.5 billion.

In contrast, USDC’s circulating supply surged by 78% year-over-year, reaching about USD 43.9 billion by the end of 2024. This growth was driven by several factors, including increasing regulatory clarity, expanding global partnerships, and a focus on trust and transparency.

While Tether remained the dominant stablecoin in the market, Circle’s strategic initiatives and partnerships fueled USDC's rapid growth, shifting the dynamics within the stablecoin landscape.

Here's a closer look at the key takeaways from the report:

Largest Stablecoin by Market Value

While Tether maintains its position as the largest stablecoin by total market value, its growth rate in 2024 was slower than that of USDC. According to the report, USDT’s market value increased by around 50% over the year. For context, at the end of 2023, Tether's market cap stood at approximately USD 91.7 billion, and it rose to reach about USD 137.5 billion by the end of 2024.

This growth can be attributed to a continuation of Tether's long-standing trajectory rather than a recovery from a recent setback. Over the longer term, Tether has experienced a 552% increase in market value since late 2020. In comparison, USDC's market cap increased remarkably by 1,135% during the same period. However, USDC's sharp rally this year contrasts with Tether's steadier expansion.

Regulatory Clarity Fuels USDC Growth

Circle's report highlights the role of regulatory clarity in driving USDC's recent growth. The stablecoin's issuer, Circle Internet Financial, had become the first MiCA-licensed stablecoin issuer in the European Union by July 2024. This licensing was part of a broader global effort to comply with evolving regulations, which included a focus on obtaining operating licenses in major markets.

In addition to the EU license, Circle also concentrated on regional compliance in jurisdictions like the United Kingdom, Brazil, Singapore, and Japan, where clear regulatory frameworks are expected to spur continued growth in 2025.

Partnerships, Remittances Boost USDC Adoption

A Circle spokesperson noted the growing adoption of USDC in regions with high remittance activity, such as Latin America, Africa, and Southeast Asia. In these areas, the digital dollar serves as a faster and less costly alternative to traditional payment systems.

According to the report, the number of wallets holding USDC reached record levels in 2024. This growth was fueled by partnerships with organizations like MoneyGram and Chipper Cash, which drove adoption among the unbanked and underbanked, offering seamless conversions between USDC and local currencies across more than 180 countries.

USDC's on-chain activity was also substantial throughout the year. Notably, monthly transaction volume surpassed the milestone of USD 1 trillion for the first time in November 2024. Total all-time transactions exceeded USD 20 trillion. The stablecoin's infrastructure support now spans 16 blockchains, and Circle’s Cross-Chain Transfer Protocol had processed over USD 20 billion in transactions, facilitating transfers across multiple blockchain networks.

In summary, despite Tether's large market share, Circle's strategic emphasis on compliance, transparency, and partnerships enabled it to close the gap significantly, with USDC's rapid growth shifting the dynamics in the stablecoin sector.