Circle-Backed USDC Reports 59% Growth in Wallet Users Despite Challenges in 2023

In 2023, the Circle-backed stablecoin USDC experienced both challenges and growth, according to a recent report by the issuer.

The number of individual USDC wallets with a balance of at least $10 grew by 59% last year. The increase took it to approximately 2.7 million. Circle noted USDC’s adoption and utility in the latest ‘State of the USDC Economy’ document.

Jeremy Allaire, co-founder and CEO of Circle, emphasized the resilience of blockchain finance. He said, “Bad actors began to bear the full weight of their nefarious activity, frauds were uncovered, yet the underlying technology matured, and mainstream businesses deepened their involvement with technologies like USDC.”

2023 was challenging, says Circle

The report also highlighted that factors like rising interest rates, regulatory crackdowns, bankruptcies, and fraud impacted the sector in 2023. In response, USDC’s circulation took a hit, dropping from $45 billion to about $25 billion by November 2023. The increased interest rates in traditional markets may have presented an opportunity cost for holding USDC without yields.

However, Circle noted that its partnerships with global banks have solidified its role as a bridge between digital and traditional finance. In 2023, Circle minted and burned $197 billion in USDC.

The report said, “A new internet financial system is emerging. Thanks to the power of USDC, blockchain networks, and some of the world’s best developers and technology companies, the financial system is being upgraded.”

In terms of network activity, USDC saw 595 million transactions by the end of November last year. It noted that the Cross-Chain Transfer Protocol (CCTP), launched in April, has facilitated 66,500 transactions.

Circle’s boasted of its availability on 15 different blockchains.

The report comes as Circle has filed for an IPO in the US, indicating confidence in its business model and prospects of growth with public money. Allaire also expressed optimism about the possibility of the U.S. passing stablecoin laws this year, which could positively impact the performance of digital currencies like USDC.