JPMorgan: Circle has a compliance advantage with MiCA, and USDC's on-chain activity surpasses that of USDT.

JP Morgan ('s latest report indicates that the US dollar stablecoin USDC launched by Circle has for the first time surpassed Tether's USDT in on-chain trading activities. With the implementation of Europe's MiCA stablecoin regulations, market funds are clearly shifting towards “transparent, Compliance” stablecoin assets, making USDC one of the biggest winners this year.

USDC on-chain activity surpasses USDT, with a market cap increase of 72% year-to-date.

The report indicates that Circle's USDC has officially surpassed Tether's USDT in on-chain trading activity. Analysis suggests that this represents a gradual shift of investors and institutional funds towards stablecoin products that comply with emerging regulatory requirements and have high transparency.

The report mentions that USDC's market capitalization surged by 72% this year, reaching 74 billion USD ), and before the deadline, it arrived at 75.7 billion USD (, far exceeding USDT's 32% growth during the same period. Although USDT remains the largest stablecoin by market capitalization globally, the changes in capital flow have already indicated a shift in market preference.

Circle has the MiCA Compliance advantages, promoting the flow of European funds towards USDC.

This report attributes the development gap between the two to clear regulations, particularly the “Crypto Asset Markets Regulation” MiCA, which will officially take effect in Europe in mid-2024. Due to Tether not having obtained MiCA authorization, USDT has recently been delisted by several European exchanges. In contrast, USDC's “Compliance status” has become an advantage.

J.P. Morgan analyst Nikolaos Panigirtzoglou pointed out that USDC not only has transparent reserve reports and regular audits, but also complies more with regulatory requirements, making institutional investors more willing to adopt it.

)Circle becomes the first MiCA Compliance stablecoin provider, will Tether's leading position be shaken?(

Blockchain and payment collaboration boosts USDC on-chain speed.

The report shows that the on-chain circulation speed of USDC has also significantly increased, primarily due to the growth of DeFi activities on the Solana and Base chains. In addition, the integration of USDC with payment giants Visa, Mastercard, and Stripe, as well as the launch of Circle's own “Cross-Chain Transfer Protocol,” have made it more efficient in payments and settlements.

The above developments have allowed USDC to evolve from a simple medium of exchange to gradually becoming a part of the global payment infrastructure.

Emerging markets are still dominated by USDT, but regulatory advantages are boosting the rise of USDC.

Although USDC has risen strongly in the European and American markets, Tether's USDT still maintains a leading position in emerging markets, particularly dominating the mainstream trading pairs in cryptocurrency exchanges. However, JPMorgan pointed out that USDC's “regulatory-driven model” could become a new standard for the global stablecoin development, challenging Tether's long-standing market dominance.

Whether the future market capitalization of USDC at 75 billion USD can surpass the 183.4 billion USD market capitalization of USDT remains to be observed.

This article Morgan Stanley: Circle has a compliance advantage under MiCA, and USDC's on-chain activity volume surpasses USDT, first appeared in Chain News ABMedia.