A wave of crypto regulations is set to take effect worldwide, and Circle has announced that USDC is the first digital asset to reach compliance with Canada’s new stablecoin laws.
The Canadian Securities Administrators has passed a set of standards defining Value-Referenced Crypto Assets (VCRA), which will go into effect next year. These laws describe VRCA as a crypto asset that maintains a stable valuation by referencing the value of a fiat currency or other asset.
The new rules require all crypto exchanges in Canada to delist any stablecoins that aren’t compliant with the regulations by December 31. Circle said that it has not only met the VCRA requirements, but that it has also reached full compliance with the Ontario Securities Commission.
“Circle is taking steps in the right direction,” said Joel Hugentober, Cryptocurrency Analyst at Javelin Strategy & Research. “Tether is so large because everyone outside of North America uses it. Circle’s partnership with Coinbase, coupled with it becoming compliant in other jurisdictions, gives them a leg up.”
The Race for Market Share
Tether’s global dominance has made its USDT stablecoin the dominant product in the market, holding a $201.2 billion share compared to USDC’s $40.3 billion. These two coins face plenty of competition in the race to dominate a stablecoin market that saw a 10% increase in November alone, with monthly trading volumes nearing $2 trillion.
Institutional investments are fueling this momentum, with some of the largest payments players now joining in. PayPal recently launched its PYUSD stablecoin, and Stripe just acquired stablecoin company Bridge in one of the largest acquisitions in crypto history.
With so many digital tokens that track the U.S. dollar, there has been much speculation about which stablecoin will win out.
“At the end of the day, they’re all pretty much the same product, but they’re not managed the same,” Hugentobler said. “If Circle continues to gain compliance in other jurisdictions, retail users will likely jump ship because their platform faces less risks. A lot of institutions prefer USDC over Tether currently, and this trend will continue as well.”
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