Circle Dominates EU Stablecoin Market as Tether Exits
Circle has emerged as the main beneficiary of the EU's MiCA regulation, which has reshaped the European stablecoin market. The firm claims that its USDC stablecoin is the only one among the top 10 by market capitalization to comply with the regulatory framework. USDC can be fully redeemed in fiat currency and holds segregated reserves, periodic attestation reports, and redemption mechanisms accessible to the public.
Tether chose to exit the European market rather than comply with the 60% rule, which requires stablecoins categorized as 'significant' to maintain at least that proportion of their reserves in bank deposits within the EU. The firm discontinued its euro-pegged token EURT and removed USDT pairs for European clients to avoid breaching the MiCA framework.
However, a study by LUISS economist Nicola Borri and University of Surrey researcher Kirill Shakhnov found that USDT and USDC market shares 'barely moved' following the delistings. Circle's share in the USDT-USDC pair grew by approximately 6%, driven mainly by a 20% drop in USDT volume rather than an increase in demand for USDC.