USDC Gains Ground on Binance as Regulatory Changes Challenge Tether’s Dominance

Binance has witnessed a notable uptick in the dominance of USDC as regulatory shifts transform the landscape of stablecoins. One year ago, USDC’s market share on Binance was a mere 0.48%, overshadowed by USDT’s significant 68.67% share and FDUSD’s 30.84%. However, over the last 12 months, USDC’s presence has surged to 8.26%, representing an astonishing 1,621% growth, as reported by CryptoQuant’s recent analysis.

The substantial increase of USDC can be primarily attributed to evolving regulatory frameworks, notably the European Union’s Markets in Crypto-Assets (MiCA) regulations. Binance’s decision to delist USDT for EU users by March 31, 2024, in an effort to align with MiCA compliance, is expected to further propel USDC’s growth trajectory. This strategic maneuver raises intriguing questions about which stablecoin will come to dominate Binance’s platform globally in the approaching months. An industry analyst noted, “As the MiCA framework reshapes the European crypto market, USDC appears poised to capitalize on regulatory shifts, potentially challenging Tether’s long-standing dominance.”

In a further boost for USDC, Japan has recently embraced it as the first and only global dollar stablecoin authorized for use. The Japan Financial Services Agency (JFSA) approved SBI VC Trade as an Electronic Payments Provider under the country’s new regulatory structure, marking it as the inaugural platform in Japan to list and distribute USDC.

As the MiCA regulations come into full effect in December 2024, they are designed to establish standardized digital asset regulations across Europe. Subsequently, high-profile crypto platforms including Coinbase and Crypto.com have begun to phase out non-compliant stablecoins such as Tether’s USDT from their offerings for EU customers.

Tether has voiced concerns regarding the accelerated transition, cautioning that the pace may disrupt the market. The company underscored that the ramifications of these regulatory changes extend beyond USDT, complicating the situation for various stablecoins. In response to the regulatory challenges posed by MiCA, Tether has decided to leverage its tokenization platform, Hadron, and its investment in the Dutch firm Quantoz as part of its strategic approach in Europe. Amid the delisting of USDT due to compliance requirements, Tether reiterated its commitment to advancing Hadron and supporting Quantoz, while reassessing its future direction for USDT within the European market.

Hadron is designed to facilitate the creation of various digital assets, including stablecoins, bonds, stocks, and loyalty programs. Concurrently, Quantoz, which has garnered Tether’s support since 2024, has rolled out EURQ and USDQ, two stablecoins that conform with MiCA’s regulatory guidelines.