USDe faces regulatory setback in Europe.

However, as adoption grows, so does regulatory pressure. Global regulators remain cautious, keeping these products outside major frameworks such as the U.S. Genius Act, Singapore’s MAS, and Hong Kong’s Stablecoin Bill, partly out of concern that widespread use could trigger deposit outflows from banks into higher-yielding stablecoin alternatives.

The latest escalation came on June 25, when Germany’s BaFin instructed Ethena GmbH to begin a 42-day wind-down of USDe redemptions in Europe, ending on August 6. This move follows a March ban on new USDe issuance, citing MiCA violations related to yield-bearing sUSDe qualifying as a security.

Despite BaFin’s action, the immediate price impact was contained. USDe briefly depegged to $0.9992 USDT on June 25 but quickly bounced back as arbitrage traders stepped in.

Still, this depeg has lingered longer than in past incidents, suggesting that markets are now treating regulatory actions as more material risks. In March, USDe also fell from its peg following BaFin’s initial issuance ban, though it recovered within a day.

Notably, at that time, direct redemptions through Ethena GmbH were not allowed, forcing all selling into the secondary market and exacerbating price pressure.

The market structure for USDe has also shifted, with trading moving from decentralized to centralized exchanges, suggesting broader adoption. Centralized exchanges now account for 67% of all USDe volume, up from 36% in March. Curve, once a major venue for USDe trading, has seen its market share shrink, while Bybit has doubled its share to 38%.

Unlike DAI, which trades broadly across altcoins, most USDe activity on centralized exchanges remains focused on blue-chip tokens like BTC, ETH, and SOL.

Integration with perpetual products has played a major role in USDe’s ability to generate high trading volumes despite being listed on fewer pairs. Bybit and Bitget have both enabled USDe to be used as collateral for perpetual trading. This allows large traders and institutions to use USDe for leveraged positions on major assets such as BTC, ETH, and SOL, driving significant transaction volume even without broad altcoin support.

In contrast, DAI’s volume is spread across hundreds of altcoins and spot pairs, but with generally lower activity per pair.

USDC’s share of global liquidity increases.

USDC liquidity is steadily gaining ground across crypto markets, even as USDT continues to dominate trading volumes and overall market depth. On major exchanges, excluding Coinbase because it merged its USD and USDC order books in 2022, BTC-USDC now accounts for 24% of the total 1% market depth. This is up from just 15% six months ago.

This rise aligns with USDC’s expanding global trading share. Market makers are increasingly favoring the stablecoin on high-volume offshore platforms such as Binance and Bitget.

The shift is not limited to Bitcoin. Major altcoins have shown similar trends, with ETH-USDC depth more than doubling since November. XRP and SOL have also recorded significant increases in USDC-backed liquidity.

As exchanges like Binance move toward greater regulatory compliance, and as the overall market adapts to stricter global oversight, USDC is well positioned to close the liquidity gap with USDT. Still, stablecoin liquidity is likely to remain more robust than fiat liquidity, especially for high-beta altcoins that lack direct fiat pairs.

For many exchanges operating outside the US and EU, stablecoins offer a simpler, lower-friction alternative to fiat and help avoid the complexities and costs associated with banking relationships.