Circle’s USDC Surpasses Tether’s USDT in Euro Stablecoin Trading Amid EU Regulatory Shift

USDC now captures 56% of stablecoin trading volume against the euro, a significant rise from just 10% in January 2024. This rapid change followed major exchanges restricting USDT trading for customers within the European Economic Area as part of the Markets in Crypto-Assets Regulation (MiCA).

USDC also surpasses USDT in trading liquidity against the euro, with its order book depth approximately 40% greater than Tether’s. Despite this, Tether remains the largest stablecoin worldwide, with a circulating supply roughly two and a half times larger than USDC’s.

Kaiko characterized stablecoin-to-euro trading pairs as the principal gateway for European users, enabling them to convert euros into US dollar-pegged stablecoins upon entering or exiting cryptocurrency markets.

Trading volumes for the USDC-to-euro pair have even exceeded those of the USDC-to-USDT pair, highlighting a shift in market dynamics favoring euro-denominated stablecoin transactions.

These developments occurred shortly after the European Banking Authority named USDC the first "significant e-money token" within the EU under MiCA. This status subjects USDC to direct EBA oversight and imposes additional regulatory requirements on its issuer.

Kaiko also pointed out that the United States is adopting a comparable regulatory framework for stablecoins under the GENIUS Act, which might trigger a similar realignment of trading activity on American exchanges.

On October 21, the U.S. Office of the Comptroller of the Currency published its first final rule under the GENIUS Act, setting reserve and redemption mandates for stablecoin issuers under its jurisdiction, effective January 18, 2027.

Starting July 2028, U.S. trading platforms will be prohibited from offering stablecoins issued by entities that do not comply with regulatory approval requirements set forth by the law.

These regulatory changes could benefit Circle, which is actively pursuing authorization in both Europe and the U.S. Conversely, Tether has responded differently by launching a dedicated U.S.-focused stablecoin called USAT.

US stablecoin regulatory shifts are reshaping trading dynamics, with potential long-term impacts on market leadership between Circle’s USDC and Tether’s USDT globally.

The rise of compliant stablecoins like USDC underlines how regulations significantly influence trading preferences, liquidity, and market positioning within Europe and possibly beyond.