Relevant Trends

Stablecoins: Onchain Transfer Volume

On-chain Stablecoins Transfer Volume Reaches Second Highest Level Of The Year

● In July, on-chain transfer volumes of stablecoins rose 18.3% to $999bn. This is the highest recorded volume since the peak in April. Total volumes have risen 69.4% from the previous year, indicating strong momentum following the approval of spot-ETFs in the U.S.

● Among the top 5 stablecoins on Ethereum, DAI leads the group for on-chain transfer volume with $599bn exchanged in July, accounting for 59.95% of the market share. USDC and USDT follow with a transfer volume of $218bn and $173bn, accounting for 21.8% and 17.4% of the total volume of the top 5 stablecoins on Ethereum.

● Implementation and Classification: MiCA, which launched on June 30th, establishes a regulatory framework for stablecoins in the EU, categorising them into e-Money tokens and Asset-Referenced Tokens.

● Compliance and Market Impact: The regulations require stablecoin issuers to secure e-money licences and maintain significant reserves, enhancing market security. Major stablecoins like Circle's USDC and EURC have already complied.

● Integration into the Financial Ecosystem: MiCA aims to integrate digital assets into the EU's financial system by providing a consistent regulatory framework across member states, aiding in secure cross-border transactions and boosting investor confidence.

Stablecoin Regulations

USDC: Market Cap and Trading Volumes

USDC Market Cap and Trading Volumes Rise Following MiCA Regulation

● In July, the market capitalisation of USD Coin (USDC) rose by 5.36% to $33.6bn, marking the first increase in end-of-month market capitalisation for the stablecoin since April. This is the highest market capitalisation for USDC since February 2023. USDC's market dominance by capitalisation currently stands at 20.4%.

● Trading volumes for USDC pairs on centralised exchanges rose 48.1% to $135bn, benefitting from the stablecoin’s MiCA compliance after the European regulations took effect late last month. Meanwhile, Circle’s Euro stablecoin, EURC saw its market capitalisation rise by 4.05% to $33.0mn with the stablecoin expanding to the Base chain earlier this month.

European Stablecoins: Market Cap and Trading Volumes

Market Capitalisation of European Stablecoins Continues to Slide Amidst MiCA Regulations

● In July, the market capitalisation of the European stablecoins fell 1.43% to $235mn, recording the seventh consecutive decline in the end-of-month market capitalisation of the sector. Several European stablecoins have struggled even with the MiCA compliance, as investors flock towards larger MiCA compliant coins such as Circle’s EURC.

● Monerium’s EUR eMoney and Membrane Finance’s EUROe – two MiCA-compliant stablecoins saw their market capitalisation fall by 16.5% and 9.92% to $14.3mn and $1.71mn. Meanwhile, Tether’s EURT, which is yet to be MiCA-compliant, saw its market capitalisation fall by 4.63% to $31.2mn.

BUSD: Market Cap and Trading Volumes

SEC Drops Investigation of Paxos Regarding BUSD After 18 Months

● Following the announcement of a possible lawsuit, and SEC investigation into Binance’s partner, Paxos, the stablecoin BUSD saw its market cap fall by 97.3% from February 2023, with the state of New York State ordering Paxos to stop issuing the coin.

● The monthly trading volume for BUSD also decreased exponentially on centralised exchanges, with a 99.99% fall from February 2023. In June of this year, a U.S. judge ruled that BUSD was not a security. In July, Paxos announced that the SEC had dropped their inquiry after 18 months. No infringements were found and Binance and Paxos will receive no penalties.

Tron: Market Cap by Stablecoins

Tron Announces Gasless Stablecoin Transfer Solution, Expected to Launch in Q4

● Earlier this month, Tron Founder, Justin Sun announced the blockchain will support a gasless stablecoin transfer solution, expected to launch in Q4 of 2024. The solution that removes transaction fees for peer-to-peer stablecoin transfers uses smart contracts to determine the necessary amount, taking into account exchange rates and other costs, which are then covered by the stablecoins themselves.

● In July, the market capitalisation of stablecoins on the Tron blockchain rose 1.94% to $59.2bn, an all-time high for the blockchain. USDT dominates the stablecoins on the network, accounting for 98.3% of the supply. The blockchain has grown in popularity for stablecoins in recent years, due to the lower gas fees which allows users in developing countries to make peer-to-peer payments.