Circle’s USDC has overtaken Tether’s USDT in euro stablecoin trading, marking a major shift in Europe’s cryptocurrency market. The change comes as the European Union’s Markets in Crypto-Assets Regulation (MiCA) continues to reshape competition between stablecoin issuers.
According to new research from cryptocurrency market data provider Kaiko, USDC now represents 56% of stablecoin trading against the euro, compared with just 10% in January 2024.
The rapid increase highlights how European regulatory requirements are influencing trading activity, liquidity, and the adoption of dollar-backed digital assets.
USDC Overtakes USDT as MiCA Rules Reshape European Crypto Trading
USDC’s growing dominance in euro-denominated trading follows restrictions imposed on USDT by several major cryptocurrency exchanges.
Under the EU’s MiCA regulatory framework, trading platforms serving customers in the European Economic Area must comply with specific requirements for stablecoin listings.
Consequently, exchanges have restricted access to USDT for European users, encouraging greater trading activity in compliant alternatives such as USDC.
This regulatory shift has significantly strengthened Circle’s position in the European cryptocurrency market.
Furthermore, Kaiko’s findings suggest that the changes extend beyond trading volumes to market liquidity.
USDC Liquidity Surpasses Tether in Euro Trading Pairs
USDC has also moved ahead of USDT in euro-denominated trading liquidity, according to Kaiko’s analysis.
The report indicates that USDC order books are approximately 40% deeper than those of USDT in euro trading pairs.
Deeper order books generally provide greater liquidity, potentially allowing traders to execute larger transactions with less price impact.
However, Tether continues to dominate the broader global stablecoin market.
USDT’s circulating supply remains approximately 2.5 times larger than USDC’s, demonstrating that Circle’s European trading advantage has not translated into worldwide market leadership.
Kaiko emphasized the importance of euro-to-stablecoin trading pairs for European cryptocurrency investors.
These pairs serve as essential entry and exit points, enabling users to exchange euros for dollar-pegged stablecoins when buying or selling digital assets.
European Banking Authority Strengthens Oversight of USDC
The latest market developments follow another important regulatory milestone for Circle.
On October 14, the European Banking Authority (EBA) classified USDC as the European Union’s first significant e-money token under MiCA.
The designation introduces additional regulatory obligations and strengthens supervisory oversight of the stablecoin.
Beginning November 12, 2026, the EBA will assume direct responsibility for supervising key areas, including reserve assets, liquidity requirements, and redemption arrangements.
Meanwhile, France’s banking regulator will retain responsibility for other aspects of Circle’s European operations.
The classification represents an important development for USDC as European regulators establish a more comprehensive framework for digital asset markets.
It also highlights the increasing importance of regulatory compliance for stablecoin issuers seeking access to European investors.
US GENIUS Act Could Further Reshape Stablecoin Competition
Similar regulatory developments are also taking place in the United States.
According to Kaiko, the implementation of the GENIUS Act could produce changes in American stablecoin trading similar to those already observed in Europe.
The legislation establishes federal requirements for payment stablecoin issuers, including rules covering reserve assets, redemption procedures, and regulatory supervision.
On October 21, the Office of the Comptroller of the Currency (OCC) announced a final rule implementing major provisions of the legislation.
The new requirements are scheduled to take effect on January 18, 2027.
Additionally, beginning July 18, 2028, cryptocurrency platforms serving US customers will face broader restrictions on offering stablecoins issued by companies without the required regulatory approval, subject to applicable exemptions for qualifying foreign issuers.
These changes could encourage trading platforms to prioritize stablecoins that meet the new regulatory standards.
Circle and Tether Pursue Different Regulatory Strategies
The evolving regulatory environment could significantly affect competition between the world’s leading stablecoin issuers.
Circle has focused on obtaining regulatory authorization in both Europe and the United States, positioning USDC for markets with increasingly strict compliance requirements.
Tether, meanwhile, has adopted a different strategy by introducing USAT, a separate stablecoin designed specifically for the American market.
These contrasting approaches demonstrate how stablecoin companies are adapting their operations to different regulatory environments.
For European traders, USDC’s expanding market share already illustrates the potential impact of these changes.
However, the long-term balance between USDC and USDT will depend on several factors, including exchange listings, liquidity, regulatory compliance, and global investor demand.
As Europe implements MiCA and the United States prepares to enforce the GENIUS Act, regulation is becoming an increasingly important factor in determining which stablecoins dominate cryptocurrency trading markets.
