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The crypto payments landscape just experienced its most dramatic shift in years, and it’s not what most investors saw coming. While Bitcoin grabbed headlines with its price volatility, a quieter revolution was unfolding in the world of digital commerce—one that could reshape how businesses and consumers think about cryptocurrency transactions.
According to CoinGate’s H1 2025 Crypto Payments Report, USDC usage exploded by 337% in the first half of 2025, catapulting it into the top five cryptocurrencies and capturing a dominant 68% share of all crypto payouts. This wasn’t just growth—it was a seismic shift that saw USDC overtake Tether in payment volume by June.
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The catalyst? Europe’s Markets in Crypto-Assets Regulations, which forced payment processors to phase out USDT support due to compliance concerns. What seemed like a regulatory headache became USDC’s golden opportunity, as businesses and consumers migrated en masse to the Circle-issued (NYSE:CRCL) stablecoin for its regulatory compliance and multi-blockchain availability.
“This regulatory shift didn’t just change the rules—it revealed who was truly ready for the institutionalization of crypto,” says the report. The speed at which the market adapted suggests that businesses were already looking for more compliant alternatives.
While stablecoins dominated the narrative, Bitcoin quietly reclaimed its throne as the most-used cryptocurrency in Q2, securing 23.3% of the overall blockchain network share for H1. This resurgence coincided with the decline of Tron-based USDT transactions, creating space for the original cryptocurrency to reassert its dominance.
The data reveals something crucial: despite years of predictions about Bitcoin’s obsolescence as a payment method, it remains the backbone of crypto commerce. “The original cryptocurrency isn’t going anywhere,” the report emphasizes, challenging the notion that newer, faster alternatives would inevitably replace BTC in everyday transactions.
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Perhaps the most significant technical development was the explosive growth of Layer-2 networks. Polygon saw a 117% increase in transactions compared to all of 2024, while newcomer Base—launched in February—quickly captured attention with 59% of its transactions involving USDC.
Arbitrum joined the party, accounting for over 9% of total USDC transactions. These networks didn’t just improve transaction speed and reduce costs—they made crypto payments accessible to a broader range of businesses and consumers who previously found blockchain transactions too expensive or slow.
Here’s where the story gets really interesting for investors: merchants are keeping their crypto. Crypto settlements rose to 40.9% of all activity in H1 2025—a 14% increase from the previous year. This signals a fundamental shift in how businesses view cryptocurrency, treating it as a treasury asset rather than just a payment rail.
USDC emerged as the clear favorite for merchant payouts with 68% usage, while Bitcoin captured 17% of the payout market. This preference reveals something important about institutional adoption: when businesses choose what to hold, they gravitate toward regulatory compliance and stability.
The CoinGate report reveals three critical investment themes:
Regulatory Compliance is the New Moat: USDC’s 337% surge demonstrates that regulatory clarity creates massive competitive advantages. Investors should watch for similar compliance-driven shifts in other crypto sectors.
Infrastructure Matters More Than Headlines: While Bitcoin’s price movements capture attention, the real money is being made in the infrastructure layer. Layer-2 networks and compliant stablecoins are where the adoption growth is happening.
Institutional Adoption is Accelerating: When 40.9% of merchants choose to hold crypto rather than convert to fiat, it signals genuine confidence in digital assets as store of value, not just payment mechanisms.
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Despite the positive trends, several challenges remain. The market’s quick adaptation to MiCA regulations showed resilience, but it also highlighted how dependent crypto payments are on regulatory stability. A slight dip in April, caused by USDT volume disruptions, demonstrated how quickly regulatory changes can impact transaction volumes.
Additionally, the concentration of power in a few major stablecoins creates systemic risks. USDC’s dominance, while positive for compliance, also means that any issues with Circle or regulatory changes affecting USDC could have outsized market impacts.
The crypto payments landscape is maturing faster than many realized. The shift from USDT to USDC wasn’t just about regulatory compliance—it revealed a market ready for institutional-grade infrastructure. Combined with Bitcoin’s resilience and the success of Layer-2 networks, the data suggests that crypto payments are moving from experimental technology to business-critical infrastructure.
For investors, this evolution signals opportunity in the infrastructure layer of crypto—the networks, protocols, and services that enable commerce rather than just speculation. The 337% surge in USDC usage isn’t just a number; it’s a roadmap for where the smart money is heading in the crypto payments revolution.
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This article This Under-the-Radar Stablecoin Just Exploded 337%—And It’s Reshaping How Businesses Think About Crypto originally appeared on Benzinga.com
