USD Coin’s (USDC) market share in euro trading pairs has surged to 56%, up sharply from 10% in January 2024. Data from analytics provider Kaiko shows the Circle-issued token has officially overtaken Tether USD (USDT) in both transaction volume and market liquidity. On euro exchanges today, USDC’s order book depth is 40% deeper than USDT’s.
This liquidity shift marks a clear turning point in the European market: regulatory compliance has begun redirecting transaction flows previously dominated by Tether.
Exchange Compliance and MiCA Token Restrictions
Major crypto exchanges are accelerating this transition to comply with the Markets in Crypto-Assets (MiCA) framework. The European Union regulation restricts the offering of unauthorized tokens, including USDT, to users in the European Economic Area (EEA). As a result of these restrictions, exchanges are directing liquidity toward legally compliant assets.
Euro trading pairs play a vital role, serving as the primary on-ramps and off-ramps for European investors to swap local currency for US dollar-pegged stablecoins. Once USDT access was restricted across these conversion gateways, capital flows rotated into compliant alternatives.
USDC’s position strengthened further after the European Banking Authority (EBA) designated it as the first significant e-money token under MiCA. The banking regulator’s decision came two weeks before Kaiko’s report was published.
Potential Regulatory Effects in the US Market
Losing its grip on euro exchanges has not shaken Tether’s global standing. In the global market, USDT’s circulating supply remains roughly 2.5 times larger than USDC’s, maintaining its lead in international trading volume.
Nevertheless, Kaiko notes that similar dynamics could play out in the United States alongside the implementation of the GENIUS Act. The US legislation includes initial reserve requirements from the Office of the Comptroller of the Currency (OCC) taking effect on January 18, 2027, followed by exchange restrictions in July 2028.
In response to this new policy direction, the two issuers have taken divergent paths. Circle opted to pursue official licensing across the European Union and the United States. Tether, on the other hand, is preparing a US-specific stablecoin dubbed USAT to satisfy requirements without altering the structure of its flagship product.
What It Means for Investor Liquidity
For market participants in Europe, USDC’s 40% deeper order books offer tighter spreads when trading euros for digital dollars. Exchange-level ground rules have proven capable of shifting market liquidity in under two years.
The next competitive showdown will be decided in the United States once the GENIUS Act takes effect: whether Tether can preserve its user base through USAT, or if Circle’s compliance-first playbook will capture market share once again.
Reported by Cointelegraph.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
