• The supply of USD coins has increased by over 14% since December.
• The increase in liquidity is seen as a sign of fresh capital inflows following the launch of a Bitcoin spot ETF in the US.
• The presence of stablecoins is also growing in markets outside the United States.

USD Coin (USDC), issued by Circle, is the second-largest stablecoin in terms of market capitalization, but it has seen increasing liquidity around the world, particularly a surge in usage outside of the United States, and a drop in supply in recent months. This has led to a sharp increase in volume, Coinbase said in a February 26 research report.

“Since December 1, 2023, the supply of USDC has increased by 14.3%, or more than $3.5 billion (approximately 525 billion yen, equivalent to 1 dollar = 150 yen), and the market capitalization has increased to $28 billion (approximately 4.2 trillion yen). “Tether (USDT)’s growth rate during the same period was 8.7%,” analysts David Duong and Li Liu wrote. Tether is a rival stablecoin with a market capitalization of $98 billion (approximately 147 trillion yen), significantly larger than USDC.

The increase in USDC liquidity comes as crypto assets (virtual currencies) move into a new phase of the market cycle and new funds The inflows reflected an overall recovery in demand from both retail and institutional investors,” the report’s authors wrote.

A stablecoin is a type of crypto asset that is typically pegged to the US dollar, but can also be based on other currencies or assets such as gold.

The report states that USDC is increasing its presence in markets outside the United States, with the stablecoin increasing its share of spot and derivatives trading by five times, but for now, it remains the largest in centralized trading worldwide. It pointed out that the share of trading volume of exchange (CEX) is only 4%.

Reports say that the increase in USDC liquidity came not only from the catalyst of the BTC spot ETF, but also from the launch of Coinbase’s international exchange and the relisting of USDC trading pairs on rival exchange Binance late last year. the book added.

USDC is issued by Circle, which is backed by Coinbase.

｜Translation: CoinDesk JAPAN
｜Edited by: Toshihiko Inoue
｜Image: HFA_Illustrations/Shutterstock
｜Original text: Stablecoin USDC Is Making a Comeback: Coinbase