USDC overtakes USDT in euro stablecoin trading as EU rules reshape market: Kaiko
USDC’s share of euro stablecoin trading has climbed to 56% since January 2024, with deeper liquidity as exchanges restrict USDT under MiCA.
Asanat Analysis — Why it matters
USDC's surge to 56% of euro stablecoin trading represents a structural shift driven by MiCA (Markets in Crypto-Assets Regulation) compliance, not organic preference. EU exchanges face operational friction with USDT due to regulatory ambiguity around Tether's reserve attestation and issuer licensing requirements. This mirrors historical pattern-breaking moments: when China banned crypto trading in 2017, it fragmented liquidity; when the EU began enforcing stricter AML/KYC rules post-5AMLD, compliant stablecoins gained moat advantages.
The liquidity concentration in USDC signals two downstream effects. First, it reduces arbitrage opportunities and increases execution costs for traders routing through non-EU venues—a friction tax on capital efficiency. Second, it incentivizes offshore platforms to adopt USDC to maintain competitive advantage with European users, indirectly expanding Circle's settlement footprint. Tether still dominates globally (>60% of stablecoin supply), but regional regulatory fragmentation is carving out zone-specific leaders.
This precedent matters beyond euros: similar MiCA-style frameworks emerging in Singapore, Hong Kong, and UK suggest stablecoin market share will increasingly fragment by jurisdiction rather than consolidate. Projects without formal issuer licenses face structural disadvantage, not temporary headwinds.