Key Insights:
- USDC’s transaction volume reached $456 billion last week, vastly outpacing USDT’s $89 billion.
- Despite a higher circulation of USDT, USDC dominates 50% of the total stablecoin transactions in 2024.
- Visa’s partnership with Circle since 2020 has contributed to the increased use of USDC for transactions.
Visa has recently reported that Circle Internet Financial’s USDC stablecoin has surpassed Tether’s USDT in terms of transaction volume for the year. This marks a significant shift in the stablecoin market, where USDT has long been considered the leader. The data, which comes from a collaboration between Visa and Allium Labs, offers a clearer picture of the stablecoin landscape by removing distortions caused by inorganic activity and other market manipulations.
According to Visa Onchain Analytics Dashboard, USDC has surpassed USDT as the leader in transaction volume this year. pic.twitter.com/Aoc5flE3ps
— Drop (@GenialPoise_c) April 29, 2024
According to the adjusted figures, USDC recorded a staggering $456 billion in transaction volume last week. This is a sharp contrast to the $89 billion registered for USDT. Since the beginning of 2024, USDC has accounted for half of all stablecoin transactions.
Moreover, this trend reveals a shift in how stablecoins are used in the market. While USDT has a 68% market share in terms of coins in circulation, according to data from DefiLlama, USDC’s usage as a transaction medium has surged.
Noelle Acheson, a respected voice in the crypto community, notes that USDT is more frequently used outside the US as a dollar substitute. In contrast, USDC has found its niche within the US as a preferred medium for transactions. This usage pattern could help explain the observed trends in Visa’s data.
Additionally, the role of stablecoins in the broader financial ecosystem cannot be underestimated. They are crucial for traders to move funds seamlessly across different tokens and are increasingly used in cross-border remittances. Visa’s Cuy Sheffield highlights that understanding stablecoin transactions can be challenging. The figures often include automated bot trades, which do not represent human-initiated transactional activity. Once these are filtered out, the total transaction volume drops significantly.
This new data emerges in the wake of last year’s US banking crisis, which saw a notable dip in USDC’s circulation following Circle’s exposure to the collapse of Silicon Valley Bank. From a high of $56 billion, the total value of USDC in circulation had fallen to $23 billion by December 2023. However, it has since rebounded to $32.8 billion.
