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Circle, the issuer of stablecoins, is a company based in the United States, with 70% of its USDC usage coming from regions outside the US.
As per the estimates provided by Circle’s CEO Jeremy Allaire, some of the most rapidly expanding markets are those that are emerging and developing, which are not located in a country currently experiencing significant regulatory challenges.
Not Focused on the US
Allaire shared on X (formerly Twitter) that he has noticed “strong progress” in Asia, LATAM, and Africa, emphasizing the demand for “safe, transparent digital dollars.”
Circle is not the only entity that has shown a lack of particular focus on the US market. Tether’s chief technology officer, Paolo Ardoino, has also expressed a similar view, stating earlier that the stablecoin firm aims to establish USDT as “a secure tool for emerging markets and developing nations, a lifeline for many communities grappling with severe devaluation of their national currencies.”
Allaire’s comments align with a decrease in the supply of the USDC stablecoin since the beginning of 2023, attributed to falling demand and an increase in redemptions. With redemptions outpacing issuance, concerns regarding USDC’s liquidity have resurfaced. The Circle CEO also addressed this matter, confirming the issuance of $5 billion in USDC and the redemption of $6.6 billion in USDC.
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Reinforcing Circle’s growth, Allaire disclosed that the stablecoin issuer is actively partnering with several esteemed financial institutions across major global regions.
Change in Stablecoin Landscape
USDC has experienced a tumultuous start, losing over 43% since the year began. However, the stablecoin has managed to maintain its market cap above $26 billion in recent weeks after a brief dip below that threshold. This stability comes despite Binance liquidating a considerable portion of the token, as recently noted by Coinbase CEO Brian Armstrong.
The unexpected statement from the executive occurred during Coinbase’s second-quarter earnings call, where he mentioned,
“Binance actually moved some of their funds from USDC into another stablecoin. I think the data we have in the last six or seven weeks, I believe, that the USDC market cap is up net of that. And so that’s an important data point.”
A search for an alternative stablecoin follows the directive from the New York Department of Financial Services (NYDFS) to halt the issuance of the dollar-pegged BUSD stablecoin. Binance has redirected its attention to TrueUSD (TUSD) as a solution for its stablecoin needs. However, TUSD lost its peg, and its issuance was halted by June 10th.
Conversely, the emergence of FDUSD has drawn the interest of Tether’s Ardoino, who noted that USDT faced downward pressure, while its main competitor, USDC, experienced significant redemptions instead of benefiting from such circumstances.
The shift in the stablecoin landscape is further confirmed by the recent launch of PYUSD by global payments leader PayPal.
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