Circle’s USDC Outpaces Tether in 2024 Market Cap Growth, Signaling Intensified Stablecoin Competition

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Based on Circle’s third annual “State of USDC Economy Report” published in 2024, the amount of USDC in circulation increased by a substantial 78% compared to the previous year. This significant growth follows a steep decline in the token’s market value, which dropped by approximately 45% in 2023. This dramatic fall can be attributed to the failure of Silicon Valley Bank, an event that led to a brief disconnect between USDC and the U.S. dollar and triggered a large-scale sell-off.

In simpler terms, the report shows that USDC increased from around $24.4 billion at the beginning of 2024 to $43.9 billion by the end of the year, which is an overall increase of 79%. However, its market capitalization is still about 22% lower than its highest point of $55.9 billion in June 2022. Circle believes that the growth it experienced in 2024 was due to clearer regulations in major markets, improvements in blockchain infrastructure, and a strong emphasis on trust, transparency, and usefulness.

Largest Stablecoin by Market Value

Compared to Tether, USDC, another major stablecoin, is expected to have a more significant growth rate in 2024. While Tether’s market value will likely increase from $91.7 billion at the end of 2023 to approximately $137.5 billion, representing around a 50% growth, USDC is predicted to grow even faster, reaching about $186.4 billion—a jump of over 100%.

The surge in Tether’s market cap is part of its consistent long-term growth rather than a rebound from a recent crisis. Over the last two years, Tether has experienced an impressive 552% increase in market value, whereas USDC has seen an even more remarkable 1,135% rise during the same period. However, this year has seen a dramatic surge for USDC compared to the steady growth of Tether, suggesting a change in momentum within the stablecoin sector.

Circle underscored that having clarity in regulations was crucial for USDC’s recent expansion. By July 2024, it had achieved a significant milestone by becoming the first MiCA-licensed stablecoin issuer in the European Union. This advancement was part of an ongoing global initiative to adhere to changing regulations. The company also prioritized compliance with regional regulations in countries like the United Kingdom, Brazil, Singapore, and Japan – regions where clear regulatory guidelines are anticipated to foster continued growth in 2025.

A representative from the Circle organization emphasized that the use of USDC (US Dollar Coin) is increasingly popular in areas with significant remittance traffic, such as Latin America, Africa, and Southeast Asia. This digital money provides a quicker and more economical option compared to traditional payment methods.

Beyond achieving regulatory benchmarks, Circle highlighted that collaborations with entities like MoneyGram and Chipper Cash have been instrumental in boosting usage among the unbanked and underbanked. These partnerships enable smooth conversions between USDC (Circle’s stablecoin) and local currencies across over 180 countries.

The report emphasized that USDC saw significant on-chain activity, as monthly transaction volume surpassed one trillion USD for the first time in November 2024, with total lifetime transactions exceeding a staggering 20 trillion USD. The stablecoin’s infrastructure spans across 16 different blockchains, and Circle’s Cross-Chain Transfer Protocol has managed over 20 billion USD in transactions, enabling transfers across multiple blockchain networks.

Tether, less active in securing licenses or adhering to regulations in certain major markets, still leans heavily on its substantial market dominance. On the other hand, Circle places a priority on compliance and transparency, enabling over $850 billion worth of transfers between fiat currencies. This is made possible through a wide network of banking partners across the U.S., Brazil, Mexico, the European Economic Area, Singapore, and Hong Kong. These alliances not only build trust but also offer essential onboarding and offboarding functionalities that facilitate business-to-business payments and cross-border transactions.

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2025-01-15 12:42