In July, the total stablecoin market capitalization saw an impressive growth of 2.11%, reaching a total of $164 billion. This upward trend marks the tenth consecutive month of ascent for major stablecoins, with their market dominance increasing to 6.93%.
Tether, the largest stablecoin by market cap, experienced a 1.61% increase to $116 billion, setting a new all-time high. This marks Tether’s eleventh consecutive monthly rise in market capitalization. According to DefiLlama, Tether (USDT) now holds nearly 70% of the stablecoin market share.
While Tether saw significant growth, other major stablecoins like USD Coin (USDC), BlackRock’s BUIDL, and PayPal USD (PYUSD) also saw increases in market capitalization. However, First Digital USD (FDUSD) and Ethena USDe experienced declines during this period. Among the top ten stablecoins, PayPal USD emerged as the largest gainer, rising by 17.9% to $589 million.
USDC now accounts for 73.5% of the market share (excluding Tether) among the top ten stablecoins by market capitalization. Trading volumes on USDC pairs on centralized exchanges rose by 48.1% to $135 billion, benefitting from the stablecoin’s compliance with the Markets in Crypto-Assets (MiCA) regulation in Europe.
The recent implementation of MiCA regulations has raised concerns about the future of Tether (USDT) in Europe and contributed to a decrease in stablecoin trading activity on centralized exchanges. Under these regulations, issuers of stablecoins must be based in the European Union, notify relevant authorities, and submit a white paper for approval. Larger stablecoins face even stricter regulations, including a cap on daily transactions and requirements for reserves to be held in cash deposits across multiple banks.
Stablecoins such as Circle’s USD Coin (USDC) and EUR Coin (EURC) have already complied with these regulations, leading to increased confidence and trading activity. The introduction of MiCA regulations has reshaped the stablecoin landscape in Europe, making compliance a critical factor for continued market participation and growth.
The rise of stablecoin market capitalization in July highlights the resilience and adaptability of major stablecoins in the face of regulatory changes and market challenges. With Tether leading the pack and other stablecoins also making significant gains, the future looks promising for the stablecoin market. Compliance with regulations such as MiCA will be crucial for sustained growth and stability in the industry.