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Circle has obtained registration as an electronic money institution in France. This grants the firm a crucial license to issue stablecoins under the European Union's new stringent crypto regulations. And thus Circle's USDC might finally get an edge over Tether's USDT. The approval comes from France's banking regulator, ACPR. Circle is now the first global stablecoin issuer to comply with the EU's Markets in Crypto-Assets (MiCA) framework, which many crypto fans have already dubbed 'demonic', 'unhealthy' and even 'orwellian'. The license enables Circle to issue its USDC and EURC tokens in the EU. These will now comply with MiCA's stablecoin rules. Circle is also launching its Circle Mint service in France. Jeremy Allaire, Circle's CEO, called the approval "a huge milestone". He emphasized the company's commitment to regulatory compliance since its founding and now this long-term investment has paid off. Stablecoins are cryptocurrencies pegged to traditional assets. They offer stability in the volatile crypto market. Traders use them to move quickly between cryptocurrencies. The EU passed MiCA last year. It's the world's first comprehensive crypto law. Also deemed as one of the harshest ones. MiCA outlines investor protection rules and safeguards against market manipulation. Stablecoin provisions under MiCA were approved last week. These rules are particularly strict. They limit trading volumes for certain stablecoins, especially those denominated in US dollars. Circle's French registration allows it to offer services throughout the EU. This includes minting and redeeming USDC via Circle Mint. MiCA permits crypto businesses to "passport" their services across the bloc. The remaining MiCA obligations will apply from December 30, 2024, but crypto companies will have until July 2026 to achieve full compliance. Two years isn't a very long period for the world of finance, to say the least. USDC is the second-largest stablecoin globally. It has $32.4 billion in circulation. Tether's USDT remains the largest, with $112.7 billion in circulation. Yet, Tether hasn't done crucial steps to comply with MiCA demands, and we will have to wait and see how it ends for the leading stablecoin. As well as for its competitors.

Stablecoin holdings among investors fell from 50.2% in December to 42.8% in May, Bybit's Q2 Asset Allocation report reveals. Bitcoin remains the largest single asset held, accounting for 26% of total assets. That should not come as a surprise, but excluding stablecoins, Bitcoin and Ethereum comprise 61% of users' crypto investments. Retail traders favor Bitcoin over Ethereum. This preference persists despite renewed optimism for ETH Spot ETFs, analysts note. Institutional positions in Bitcoin and Ethereum are more concentrated than retail traders'. Holdings stand at 39.4% and 20.9% respectively as of May. The report highlights institutional investors' clear preference for Bitcoin. Satoshi would be proud of us. His creation remains the leading crypto despite all the new winds blowing in the crypto world recently. Since Bitcoin Spot ETF approval in January 2024, institutional Bitcoin holdings have increased. It clearly shows us that ETFs were really the way to go. Ether positions have decreased. This suggests institutions view Bitcoin as more attractive. Concerns about Ether Spot ETFs not including staking rewards may be a factor. Retail traders demonstrated market timing skills during the March-April 2024 correction. They reduced Bitcoin positions in March and gradually increased them in April and May. This indicates some avoided the pullback and capitalized on the market's rebound. The report also examined asset allocation strategies across user segments. Institutions hold more concentrated positions in Bitcoin and Ethereum. Their concentration ratio increased from 25.4% in December 2023 to 39.4% in May 2024. Retail traders maintain more diversified portfolios. However, they show a slight increase in concentration due to preference for new altcoins. Altcoin holdings fluctuated, initially dropping from 25% in January 2024 to 20.9%, before rebounding to 22.5% in May 2024. New trading narratives drove these fluctuations. Bitcoin Layer 2 projects and meme tokens gained popularity among retail traders. Institutions increased altcoin positions in Q2 2024, primarily through new token investments. Stablecoin advocates argue for their potential to disrupt payments. PayPal introduced its PYUSD stablecoin last year to facilitate instant, low-cost transfers. Stripe announced on April 25 that it would allow merchants to accept stablecoins for online transactions. Stripe's initiative starts with USDC stablecoins on Solana, Ethereum, and Polygon blockchains.

Circle CEO Jeremy Allaire predicts a quick rise of the stablecoins. The man's company runs second largest stablecoin out there - our beloved USDC - so it's not a surprise Allaire is bullish. But he has some rather interesting arguments. Allair took to X to reveal four reasons why he is 'more optimistic about crypto and stablecoins than ever before.' According to Circle's chief, stablecoins could account for 10% of “global economic money” over the next ten years. The biggest reason for that would be the adoption by most of the world’s largest payments companies. They are actively using stablecoins and trying out the benefits of blockchain for their business. We're talking about 'billions market', Allaire thinks. He also claims that unleashing digital dollars on blockchains can fulfill the promise of banking the unbanked. Remittance costs will be lowered and seamless cross-border commerce will become available for everyone, said Allaire. Of course, all of that means global crypto adoption, including Bitcoin and leading altcoins. But Circle's chief predicts that stablecoins will become an increasingly accepted form of digital money. According to Allaire, stablecoins will make up a “larger and larger portion” of the world’s $100 trillion market for electronic money within the next 10 years. Analysts note that for Allaire’s 10% prediction to come true by 2034, the stablecoin market would need to grow at least at a compounded annual growth rate of 47.7%. As of now, USD Coin (USDC) — a U.S. dollar stablecoin issued by Allaire’s Circle — currently has a $32.8 billion market cap. It's the second largest stablecoin in the world behind Tether's USDT.

Stablecoin transfer volume increased 16x during past 4 years. That could be a sign of growing adoption for a maturing crypto industry, analysts say. According to Token Terminal data, in April 2024 the monthly stablecoin transfer volume reached a record high of $1.68 trillion. This is roughly a 16-fold increase over $100 million in October 2020. There were over 31.1 million total monthly active stablecoin users that made over 353 million transactionsin April, according to Visa’s stablecoin dashboard. The cumulative market capitalization of all stablecoins sits at over $162 billion. An impressive number, especially when compared to $130 billion on Jan. 1 2024, as DefiLlama data shows. That is a strong signal. Crypto industry is getting more matured, investors's conviction is growing. And that means more incoming capital. To a certain degree, stablecoins' success is no less important than Bitcoin's peak price. Stablecoins are the main bridge between the traditional financial system and the crypto world. Crypto enthusiasts often say that Bitcoin might be the crypto gold, Ethereum might be the crypto silver, yet stablecoins are the blood in the veins of the market. The more people are ready to use stablecoins for their everyday financial activities, the more blockchain adoption we might see in the future.

Tether unveiled a new stablecoin which is pegged to U.S. Dollar. But has a peculiar difference from the existing - and extremely popular - USDT. The new token is called Alloy (aUSDT) and it is backed by overcollateralized gold reserves rather than government debt. Tether released a very pompous statement on the subject. “aUSDT unifies the most popular currency in the world with the store of value used by humanity for the last 5,000 years,” the company wrote on X. Tether claims that gold-backed currencies were "historically strong". They always helped to reduce inflation and sustain steady economic growth. As for Alloy (aUSDT), Tether claims it is going to be a super reliable token. Firstly, because it is overcollateralized, which means it is backed by value that exceeds the number of tokens in circulation. it creates a kind of a buffer zone for price bumps. For instance, if gold suddenly starts falling down in price, the stablecoin might lose its dollar peg. But, hopefully, that is not possible if all the investors know that aUSDT is overcollateralized, and Tether always has enough resources to back it. What's more interesting, aUSDT is not backed by gold. Tether decided to use another of its assets, Tether Gold (XAUT), as a backup. XAUT is a popular token pegged to and backed by one troy ounce of gold. So it's the excessive holdings of XAUT that are backing aUSDT, not real gold. XAUT has a good standing on the market. Its market cap is over $574 million now, which makes it the largest gold-pegged stablecoin at the moment. Paxos's PAXG is following closely with $428 million.