Stablecoin usage surged in Q3 as market cap hits $170b: Coinbase

According to the Q4 Crypto Markets Guide report prepared by Coinbase with Glassnode, there was an increase in stablecoin usage and adoption in the third quarter of 2024.

According to the report, stablecoins reached an all-time high market value of approximately $170 billion in the third quarter of 2024. This growth comes alongside the implementation of the European Union’s new Crypto Asset Markets regulation, which introduces clearer rules for stablecoin operations.

Stablecoins have become an important tool for users looking for faster, cheaper and safer transactions. Its benefits in payment systems, including remittances and cross-border transfers, have continued to grow.

Recently, Anthony Pompliano argued that technological innovations outside of crypto could lead to a new era in which stablecoins become the primary means of transaction in a machine-driven economy. This increased adoption reflects the growing role of stablecoins in crypto trading and real-world financial systems.

According to the report, stablecoin volumes reached nearly $20 trillion year-to-date as of the third quarter, demonstrating their growing role in the global economy.

Source: Coinbase and Glassdoor Stablecoin and Bitcoin dominance

Stablecoin dominance along with Bitcoin (BTC) increased in the third quarter as crypto investors turned to what they see as the highest quality digital assets.

According to the report, the current BTC cycle closely tracks the 2015-2018 and 2018-2022 cycles, which resulted in returns of approximately 2,000% and 600%.

Source: Coinbase and Glassdoor What is MiCA?

The Crypto Asset Markets Regulation is a comprehensive framework introduced by the European Union in June 2023 to regulate the crypto industry in its 27 member states. It opens a 12-18 month transition period to implement rules on issues such as anti-money laundering, combating the financing of terrorism and digital asset custody.

MiCA’s impact on stablecoins remains to be seen, but Tether (USDT) CEO Paolo Ardoino expressed concern that MiCA’s 60% cash reserve requirement for stablecoins could create systemic risks for European banks. He argued that such regulations could worsen liquidity problems during large-scale redemptions and potentially lead to bank failures.