In July, the total stablecoin market capitalization experienced a 2.11% increase, reaching $164 billion. This growth has been consistent for the past ten months, with major stablecoins gaining more market dominance, which now stands at 6.93%. Tether, the largest stablecoin by market cap, reached a new all-time high of $116 billion, representing a 1.61% increase. Interestingly, Tether’s market capitalization has been on the rise for eleven consecutive months. Notably, Tether (USDT) holds nearly 70% of the stablecoin market share, according to DefiLlama.
While Tether saw significant growth, other major stablecoins like USD Coin (USDC), BlackRock’s BUIDL, and PayPal USD (PYUSD) also experienced increases in market capitalization. However, First Digital USD (FDUSD) and Ethena USDe saw declines during this period. Among the top ten stablecoins, PayPal USD emerged as the largest gainer, with a 17.9% increase to $589 million, setting a new record. USDC now accounts for 73.5% of the market share among the top ten stablecoins, excluding Tether. It is worth noting that trading volumes on USDC pairs on centralized exchanges rose by 48.1% to $135 billion due to compliance with the Markets in Crypto-Assets (MiCA) regulation in Europe.
Despite the overall increase in stablecoin market capitalization and trading volumes for some stablecoins, there was an 8.35% decrease in total stablecoin trading volumes, which amounted to $795 billion in July. This decline can be attributed to struggling activity on centralized exchanges. The recent implementation of MiCA regulations in Europe has raised concerns about the future of Tether in the region, leading to decreased stablecoin trading activity. The regulations require issuers to be based in the EU, notify authorities, and submit white papers for approval. Additionally, larger stablecoins face stricter regulations, including caps on daily transactions and reserve requirements for greater stability and security in the market.
The introduction of MiCA regulations has undoubtedly reshaped the stablecoin landscape in Europe, making compliance a crucial factor for market participation and growth. Stablecoins like Circle’s USD Coin (USDC) and EUR Coin (EURC) have already complied with these regulations, leading to increased confidence and trading activity among investors. The focus on regulatory compliance is likely to continue shaping the future of stablecoin trading, with market participants adapting to the changing regulatory environment for long-term sustainability.
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