Stablecoins are having a moment. Their market cap hit $164 billion in July. That's the highest since April 2022. It's a 2.1% bump from June. Circle's USDC is the star of the show.

Its trading volume on centralized exchanges reached a whopping $135 billion by July 25. That's a 48% jump. Not too shabby.

USDC's market cap also rose 5.4% to $33.6 billion. What's behind this surge? Two things: market inflows and new EU rules.

On July 1, the EU's Markets in Crypto-Assets (MiCA) framework kicked in. Circle was quick off the mark. They became the first stablecoin issuer to get the regulatory green light in Europe.

Tether, the big dog in the stablecoin world, grew too. But slower. Its market cap hit $114 billion, up 1.6% in July. That's 11 months of growth in a row. Pretty solid.

Tether's still top dog, though. DefiLlama says it's got nearly 70% of the stablecoin market. And get this – Tether reported record profits of $5.2 billion in the first half of 2024. Not too shabby.

But it's not all rosy. Trading volume on centralized exchanges dropped 8.4% to $795 billion by July 25. That's the fourth month in a row it's gone down. Bit of a bummer.

The new EU rules are shaking things up. Some crypto exchanges in Europe delisted stablecoins before the June 30 deadline. Talk about a last-minute scramble.

The new rules are pretty strict. Stablecoin issuers need to be based in the EU. They've got to notify authorities and submit a white paper for approval. Big stablecoins face even tougher rules.

Tether's CEO, Paolo Ardoino, isn't thrilled. He said in May, "Very few banks accept this type of business in Europe. It's already very difficult to get just one!" Sounds like a headache.