The market capitalization of USDC, the popular stablecoin pegged to the U.S. dollar, is on the verge of reaching a new all-time high of nearly $80 billion, reflecting a surge in demand from the Middle East, particularly the United Arab Emirates (UAE).
A Surge in Demand
According to CoinMarketCap, the circulating supply of USDC has risen to approximately $79.2 billion, just shy of its previous peak of $79 billion in December last year. The stablecoin’s market cap has expanded significantly in recent weeks, growing from just over $70 billion in early February to $75 billion earlier this month.
Capital Flight and Real Estate Turmoil
The spike in USDC demand is being attributed to capital flight from the UAE, where the real estate market is experiencing significant turmoil. Dubai-based analyst Rami Al-Hashimi claims that the decline in property prices, which have fallen by about 27% this month, is driving investors to seek safer havens in digital assets.
“War panic. Capital flight. Sellers are bleeding,” Al-Hashimi wrote on X, describing the rapid shift in investor behavior.
The DFM Real Estate Index, which tracks the performance of listed real estate and construction companies in Dubai, has also seen a sharp sell-off, plummeting from around 16,800 at its recent peak to about 11,516, a decline of roughly 31%.
Real Estate and Cryptocurrency
Al-Hashimi noted that the situation has even led some property sellers to accept cryptocurrency payments directly. Certain real estate listings now offer discounts for buyers who pay using Bitcoin (BTC), with discounts ranging from 5% to 10%.
“Pay in BTC, get 5–10% off,” he wrote, highlighting the growing acceptance of digital assets in the region.
USDC Outpaces USDt in Transaction Volume
The surge in USDC adoption is also evident in its transaction volume. Japanese investment bank Mizuho reported that USDC has surpassed Tether’s USDt (USDT) in adjusted transaction volume for the first time since 2019. USDC recorded about $2.2 trillion in adjusted transaction volume year-to-date, compared to $1.3 trillion for USDt, giving USDC roughly 64% of the combined transaction share.
Looking Ahead
Despite the shift in activity, USDt remains the largest stablecoin by market capitalization at about $184 billion, far ahead of USDC’s $79 billion. However, the growing preference for USDC in the Middle East suggests a significant shift in the stablecoin landscape, particularly in regions facing economic uncertainty.
As the UAE and other Middle Eastern economies continue to navigate challenges, the role of stablecoins like USDC in providing a stable and accessible alternative to traditional financial instruments is likely to become even more pronounced.
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