- 70% of USDC adoption hails from countries beyond the United States.
- Circle’s global banking and liquidity network is actively expanding, with a focus on top-tier banks worldwide.
USDC’s International Traction
Jeremy Allaire, the CEO of Circle, recently communicated that the majority of the adoption for USD Coin (USDC) is not domestic. Specifically, about 70% of its utilization is stemming from nations outside the US. This disclosure is intriguing, especially given the general narrative which often emphasizes USDC’s primary association with the US.
Allaire’s tweet on Aug. 8, directed at his substantial following on Twitter, highlighted this trend. He expressed that the impressive overseas adoption rates challenge the notion that Circle is mainly US-centric. Allaire emphasized,
“We estimate that 70% of USDC adoption is non-US, and some of the fastest growing areas are emerging and developing markets.”
Significantly, areas like Asia, Latin America (LATAM), and Africa are among the quickest to adopt.
Despite the hype that we're all about the US, we estimate that 70% of USDC adoption is non-US, and some of the fastest growing areas are emerging and developing markets. Strong progress happening across Asia, LATAM and Africa. Demand for safe, transparent digital dollars is…
— Jeremy Allaire (@jerallaire) August 7, 2023
Interestingly, Paolo Ardoino, the CTO of Tether, another prominent stablecoin issuer, has expressed a similar sentiment. Earlier in February, Ardoino underscored that Tether (USDT) is viewed as a reliable tool particularly in emerging markets and burgeoning nations.
Beyond Adoption: PayPal and Market Dynamics
Allaire’s insights were shared around the same time as PayPal’s announcement of launching its own USD-pegged stablecoin named PayPal USD (PYUSD). Acknowledging this development, Allaire lauded both PayPal and Paxos, noting,
“It’s incredibly exciting to see such a significant internet and payments company entering the stablecoin space. This is what happens when we start to get regulatory clarity.”
Yet, 2023 has seen a dip in the supply of USDC. Factors such as decreased demand and heightened redemptions have led to its market share contracting to a mere 21%, which equates to a circulation of approximately $26.1 billion.
Allaire, on Aug. 8, addressed worries related to USDC’s liquidity. Confirming the prevailing trend, he mentioned,
“Over the past month, we’ve issued $5B USDC, and have redeemed $6.6B USDC.”
USDC Liquidity. Over the past month, we've issued $5B USDC, and have redeemed $6.6B USDC.
USDC banking is public and transparent, with 24/7/365 mint/burn, and wire settlement with nearly 90 countries.
USDC reserves are attested by Deloitte every month, and all of our T-bill…
— Jeremy Allaire (@jerallaire) August 7, 2023
However, he sounded an optimistic note regarding Circle’s global banking and liquidity network, which is on a growth trajectory. The company is in collaboration with outstanding banks in significant regions globally.
Circle’s recent transparency report, published on Aug. 3, revealed that 93% of the Circle Reserve Fund is invested in short-dated U.S. Treasurys, overnight U.S. Treasury repurchase agreements, and cash. The remaining 7% is stationed as cash reserves in various banks, as per Circle’s statement. In another significant move, Circle announced in June that it had procured a Major Payment Institution license from the Monetary Authority of Singapore.
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