Circle has said 2022 was a solid year for USDC, despite stablecoin LUNA's collapse.
As part of its 10 year anniversary, Circle released its first-ever comprehensive report about the state of the USDC economy, titled, "State of the USDC Economy — Welcome to the Utility Value Phase of Digital Currency."
In the report, Circle claimed that the fundamental promise of stablecoins such as USDC was met by the end of 2022.
2022 was a brutal year for crypto, no thanks to the collapse of LUNA. As the market continues to suffer from the effects of Do Kwon's stablecoin, Circle believes that USDC had an entirely different 2022.
"While some digital assets and so- called stablecoins like Terra-Luna collapsed under the weight of this basic tenet of regulated dollar digital currencies, USDC proved to be an enduring store of value and flight-to- safety digital currency," the report said.
Real world usage of stablecoins to achieve global interoperability between traditional and new payment networks was a major breakthrough in 2022, according to Circle.
"This convergence proves the USDC economy is not only real, but serves as a crucial bridge between internet-native finance and the real economy," Circle states.
The collapse of LUNA called for stronger regulations on stablecoins, and Circle welcomes it. Regulated stablecoins "are the most likely to be durably linked to the real economy, real people, and well inside the perimeter of regulated finance," Circle says.
"The promise of well-regulated digital dollars like USDC is fulfilling things that would not be possible with money if it remained in physical form and only traveled on largely-closed networks or analog rails."
Looking ahead, Circle says the use case of USDC is "not about disruption or deleterious competition with the traditional financial systems... but rather about unfinished work through converging business models" which "will endure and continue proliferating in 2023."
Circle's view on stablecoins not engaging in "deleterious competition" is curious considering Binance removed USDC from tis platform last September.
Read more: Binance Forces USDC-BUSD Conversion, Removes User Choice
Among many things, 2022 proved that stablecoins are not always as stable as they should be. Circle's positive approach to regulation is certainly encouraging, and USDC continues to be the second biggest stablecoin by market cap, worth over $43 billion.