Today Circle published its annual report on the USDC stablecoin, providing some impressive figures. Cumulative transaction volumes have reached $18 trillion, showing 50% year-on-year growth, with $1 trillion in transactions in November alone. The number of wallet holders (with $10+) is up 45% to 3.9 million, following 59% growth the previous year.
Stepping back, the promise of stablecoins is cheaper faster payments, particularly cross border. A stablecoin potentially reduces the number of intermediaries because the token IS the money. This contrasts with conventional payments that rely on messaging, one or more intermediary banks, and multiple KYC and AML checks. Digital asset transactions still dominate stablecoin payments, but there are signs of increasing real world growth in cross border payments.
Circle highlights three tailwinds to spur further growth. They are increasing regulatory clarity, cheaper and more scalable public blockchains, and stablecoins becoming more accessible. We’ve highlighted several examples of improved retail user interfaces and infrastructure being built for B2B payments, such as BVNK and Stripe’s acquisition of Bridge.
Compared to the previous year, there’s certainly more for Circle to celebrate. The loss of the USDC peg in 2023 meant that the issuance fell from $45 billion at the end of 2022 to $25 billion at the end of 2023. Today it is back up to $45 billion.
Stablecoin banking connections
So far $850 million has been on and off-ramped between USDC and fiat currencies. That figure will be proportionally higher than most stablecoins, as holders of other stablecoins often convert to USDC to off ramp because it is large, compliant and perceived as having better banking support.
That’s demonstrated by Circle’s banking partnerships in the U.S., Brazil, Mexico, the EEA, Singapore and Hong Kong. Hence, for B2B payments these partnerships support the stablecoin off-ramping.
Perhaps as a nod to Circle’s upcoming IPO, the report mentions the historical impact of network effects and the internet on several occasions. From the growth in video streaming since the early 2000s to the 15x in downloads between 2009 – 2022 from the Apple App Store.
Circle’s message is loud and clear – we’re still in the early days of stablecoins.
Stablecoin business partners
The report also highlights some of Circie’s business alliances, including with Ant International, Coinbase, Mastercard, Nubank and WorldPay.
One that grabbed our attention was Standard Chartered’s Zodia Markets that is using stablecoins for FX. A major pain point it addresses is the challenge of T+1 US settlement for APAC asset managers. Zodia has minted $4 billion in USDC, with an average USDC transaction size of $3.5 million.
Meanwhile, a comparison not made in the report is USDC’s November trillion figure compared to JP Morgan’s $10 trillion a day in payments. One perspective is Circle still has a long way to go. Another is how far it has come.
In our report on tokenized deposits, one of many topics explored is the relative advantages and disadvantages of stablecoins versus tokenized deposits.
Most of the growth figures are for 12 months to end November. Only market cap figures are current.
