Stablecoin Market Outlook: 2025 USDC Ecosystem Report

In 2024, the position of stablecoins as a "killer application" is widely recognized. With the U.S. government releasing clear regulatory signals, 2025 is expected to be a big year for the stablecoin market. Multiple issuers of stablecoins, various types of stablecoins, and a wealth of application scenarios will emerge.

As a compliant stablecoin issuer of USDC, Circle is one of the most successful projects in the world today. As a company preparing for an IPO, Circle is taking the traditional capital market route. Its narrative and application scenario expansion strategies are worth learning from for every stablecoin issuer and project pursuing mass adoption.

Circle has built a value internet based on stablecoins, providing a network upgrade for global finance. Blockchain brings the speed and scale of the internet to value transfer. USDC, as the tokenized version of fiat currency, is loaded onto the internet, enabling individuals and businesses to efficiently transfer, consume, save, and store value.

Circle is building an open technology platform centered around USDC, leveraging the strong position of the US dollar and the advantages of the internet to achieve similar network effects and utility for financial services.

In the past year, USDC has seen significant growth:

• The annual circulation volume increased by over 78% compared to the same period last year, surpassing other major stablecoins.
• In November, the trading volume reached 1 trillion USD, with a historical cumulative total exceeding 18 trillion USD.
• Available for over 500 million end-user wallets, supporting a wide range of applications from digital capital markets to payments.

The future of USDC is expected to accelerate adoption, mainly due to three factors:

1. Clarity of legal regulation. New stablecoin rules are being developed to establish robust compliance standards.

2. The scalability of blockchain networks. The infrastructure is rapidly improving, becoming faster, more secure, and more flexible.

3. Excellent user experience. The number of connections with traditional finance has surged, unlocking more application scenarios.

The Circle stablecoin network is achieving near-instant global value distribution. This reflects the overarching trend of financial openness, where technological advancements and the proliferation of APIs are driving instant, low-cost payments to become the expectation of users. USDC is expected to help the rapidly evolving payment landscape realize its full potential, especially in emerging markets that are quickly transitioning from cash to non-cash payments.

Overview of Circle and USDC

The Circle stablecoin network, centered around USDC, connects leading global banks, payment service providers, and other institutions, creating a comprehensive settlement system based on the internet. This network enables all parties to utilize USDC for real-time global settlements with extremely low transaction costs and global accessibility.

USDC is a digital dollar that can be transmitted across multiple blockchain networks, offering significant advantages in terms of cost, speed, and coverage. It serves as a digital store of value, unit of account, and medium of exchange. USDC not only makes the flow of funds faster and cheaper but also unlocks new financial opportunities and applications.

The principles of Circle managing USDC include:

1. Security: USDC is a tokenized dollar, not a bank deposit.
2. Transparency: Full disclosure of reserve assets, third-party assurance
3. Liquidity: 24/7 global 1:1 exchange for USD
4. Stability: Comprehensive Risk Management, World-Class Financial Partners

Approximately 90% of USDC reserves are in short-term U.S. Treasury bills and repurchase agreements, with 10% in cash. Circle discloses reserve asset information weekly and publishes audited reserve reports monthly.

Main Application Scenarios of USDC

1. Global USD Acquisition

The demand for USD is strong outside the United States. USDC is more accessible than traditional bank dollars, and its use is rapidly growing outside the United States. Circle collaborates with fintech companies, neobanks, and others to provide USDC directly to global customers.

Case:

• Nubank: The largest digital bank in Latin America, serving 105 million customers. Partnered with Circle to launch USDC in Brazil, with 30% of crypto users holding USDC.
• Lemon: Leading the retail digital currency market in Latin America. Users hold $137 million USDC, and new users have increased by 21%.

2. Digital Asset Market

The digital asset market is developing strongly in 2024, with a significant increase in mainstream adoption rates. USDC, as the most widely used regulated stablecoin, is playing an increasingly important role in these markets.

Case:

• Coinbase: A leading compliant exchange globally. Launched the Base blockchain, USDC is the main stablecoin.
• Bullish: Innovative Exchange. USDC daily trading volume is $1.3 billion, accounting for 83%.
• dYdX: Top decentralized exchange. Relaunched on Cosmos, bringing USDC liquidity using CCTP.

3. Payment

USDC is driving the development of global payments, from merchant acquiring to remittances and B2B payments. It is particularly suitable for reducing the cost of $150 trillion in cross-border transaction flows.

Case:

• Worldpay: The first global merchant acquirer to offer direct USDC settlement.
• Mastercard: supports USDC settlement on card networks.
• Zodia Markets: Collaborating with Standard Chartered Bank to promote cross-border payments for enterprises.
• MoneyGram: Using USDC on the Stellar blockchain to facilitate global remittances.
• Stripe: supports merchants to accept USDC payments on multiple blockchains.

4. Humanitarian Aid

USDC provides humanitarian organizations with a more efficient and secure aid distribution solution, supporting 180 countries with almost zero transaction costs.

Example:

• UNHCR: Distributing aid to displaced persons in Ukraine using USDC.
• Goodwall: Rewarding young people with USDC for enhancing their professional skills and environmental actions.
• Ensuro: Providing low-cost insurance for underserved markets using USDC.

Policy Regulatory Outlook

The year 2024 will be a year of breakthrough progress in the regulation of stablecoins. Emerging stablecoin rules are being established in various regions, setting clear requirements for trust, transparency, and financial integrity.

• EU: Circle obtains EMI license, becoming the first global stablecoin issuer compliant with MiCA regulations.
• United States: The two parties have established a framework for the regulation of stablecoins and the cryptocurrency market, which is expected to be approved under the new government.
• United Kingdom: May fulfill long-term regulatory commitments to the digital asset market.
• Brazil, Hong Kong, etc.: Regulations on stablecoin are expected to be introduced.

As more and more financial centers provide regulatory platforms for stablecoin activities, banks, asset management companies, and regulatory agencies are establishing key bridges from the internet financial system to the real economy. Today's stablecoins and blockchain networks are not meant to disrupt financial services, but to expand the boundaries of innovative financial services.