Visa’s Stablecoin Metric: Circle’s USDC Overtakes USDT in Transaction Volume

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As a seasoned crypto investor with a keen interest in stablecoins and their role in the digital asset industry, I find the recent shift in market dynamics between Tether’s USDT and Circle’s USDC intriguing.

Although Tether’s USDT holds the largest market share at 69% among stablecoins in the crypto industry, it has been surpassed by Circle’s USDC in terms of transaction volume.

Based on Visa’s new metric for stablecoins, which was introduced in collaboration with Allium Labs earlier this year to offer a more precise reflection of the stablecoin sector, USDC has seen consistent growth since the start of 2023.

A tool specifically engineered to minimize distortions caused by unnatural market activities and price manipulation within the stablecoin industry reveals that USDC transacted a total volume of $456 billion during the previous week. In contrast, Tether’s USDT has experienced only $89 billion in transaction volume since the beginning of the year, indicating a notable change in market trends.

USDC Dominates with 50% Market Share

As a seasoned crypto investor, I’ve noticed that Tether’s USDT has reigned supreme in the stablecoin sector for quite some time. It consistently trades as the third-largest digital asset, following Bitcoin (BTC) and Ethereum (Ether). With an impressive market capitalization of $110.64 billion, USDT sets the standard for stability and liquidity within the crypto markets.

As a researcher studying the digital asset market since 2024, I’ve observed an astonishing surge in the popularity of USDC. In fact, this stablecoin has outpaced its competitors and now accounts for over 50% of all stablecoin transactions in the industry.

Visa didn’t provide details on why USDC usage has risen more than USDT, but Noelle Acheson, writer of the “Crypto Is Macro Now” newsletter, hypothesized that USDT’s popularity as a non-US dollar reserve asset could be driving its greater adoption.

In contrast, US Dollar Stablecoin (USDC) is more frequently employed inside the United States, particularly for routine transactions and settling payments.

Circle Boosts USDC Stablecoin Adoption with Partnerships

An alternate expression could be: The increase may also be linked to the new collaboration between Circle Financials, the USDC issuer, and Stripe, a leading American payment company, which enables USDC to be utilized for transactions.

The partnership could potentially challenge USDT’s market supremacy, considering Stripe’s strong foothold in the e-commerce sector. In 2023, Stripe disclosed handling over a trillion dollars’ worth of transactions by itself.

Circle has broadened its business scope in Japan by collaborating with Coincheck Inc, based in Tokyo, to introduce its stablecoin, USDC, to a larger audience in the Asia Pacific area since February this year. This strategic alliance underscores the increasing popularity of USDC, making it a frontrunner in the worldwide stablecoin market.

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2024-04-29 17:15