USDC Reaches $20 Trillion Transaction Volume Milestone, Becomes MiCA-Compliant

Circle’s stablecoin, USDC, reached a milestone of $20 trillion in transaction volume after six years of existence. A 2024 report by the company

Stablecoins, a crucial component of the cryptocurrency ecosystem, are designed to provide price stability, making them suitable for practical use in transactions and savings. They are typically pegged to assets such as fiat currencies (e.g., USD), commodities (e.g., gold), or a basket of assets. This pegging aims to minimize the drastic price fluctuations characteristic of cryptocurrencies like Bitcoin ( BTC) and Ethereum ( ETH).

Among the various types of stablecoins, fiat-collateralized stablecoins are pegged to fiat currencies like the US dollar or the Euro. These stablecoins are backed by cash equivalents or fiat currency reserves held by the issuing company, ensuring a 1:1 ratio with the pegged fiat currency.

In the realm of fiat-collateralized stablecoins, two prominent players are USDC and EURC, both issued by Circle. USDC is pegged to the US dollar, while EURC is pegged to the Euro, offering stability for digital transactions in their respective fiat currencies.

Highlighting the growing adoption and utilization of USDC, a report by Circle in 2024 revealed that the stablecoin reached a new milestone with $20 trillion in transaction volume over six years of existence. Notably, USDC also achieved its first $1 trillion monthly transaction in November 2024, showcasing its increasing usage and liquidity in the crypto market.

This data further underscores USDC's position as one of the most widely used stablecoins, boasting a significant market share in the stablecoin landscape. Its broad usage and liquidity make it a preferred choice for various applications, including stablecoin swaps, decentralized finance (DeFi) protocols, and Web3 services.

Collectively, USDC experienced a 78% year-over-year growth in circulation, outpacing all other major global stablecoins. This growth rate surpassed even that of its key competitor, USDT, which experienced a slower increase in market value throughout the year.

At the beginning of 2024, Tether's stablecoin, USDT, had a total market capitalization of $91.7 billion, which gradually increased to reach $137.5 billion by the end of the year, indicating an increase of about 50%.

Meanwhile, USDC's total market value at the end of 2024 stood at around $43.5 billion, which was still about 22% lower than its peak market value of $55.9 billion, reached in June 2022. This data suggests that while USDC experienced significant growth in 2024, it had not yet fully recovered to its peak size from two years ago.

One key factor driving USDC's remarkable growth in 2024 was Circle's commitment to regulatory compliance and transparency. This effort culminated in Circle becoming the first major global stablecoin issuer to fully comply with the European Union's Markets in Crypto Assets (MiCA) regulation.

This compliance played a pivotal role in USDC's stability and presence in Europe, offering users a sense of security in an increasingly regulated environment.

The MiCA regulation, proposed by the European Union, aimed to establish a clear legal framework for managing digital assets. This regulation intended to maintain financial stability, protect investors, and foster innovation in the crypto market by outlining guidelines for cryptoasset issuers and service providers.

The regulation covered aspects of stablecoins, market abuse, and the operation of crypto service providers in the EU. For instance, it required stablecoin issuers to maintain sufficient reserves and follow operational guidelines to ensure stability and reliability.

Moreover, it mandated transparency, consumer protection, and security for businesses in the crypto industry.

Significantly, Circle also became the first stablecoin issuer to meet Canada's new listing rules, further demonstrating its commitment to maintaining a globally compliant and reliable stablecoin.

Collectively, these efforts by Circle and the broader regulatory landscape in 2024 contributed to the increasing adoption and utilization of USDC for various applications in the crypto ecosystem.

Beyond the traditional financial systems, USDC also played a crucial role in providing financial access to the unbanked and underbanked populations worldwide. It currently services users in more than 180 countries around the globe and boasts an open network that's integrated with 16 different blockchains.

This broad reach and interoperability make USDC a preferred choice for diverse use cases, including remittances, cross-border payments, and participation in the Web3 economy.

In another development, EURC, the euro-backed equivalent of USDC, reached a significant milestone in October 2024 by surpassing $1 billion in weekly transfer volume.

It also became the largest euro-backed stablecoin by total circulation. Euro-backed stablecoins are digital currencies pegged to the euro (EUR), the official currency of the European Union. Like USDC, which is tied to the US dollar, these stablecoins are supported by reserves held in