USD Coin (USDC), a stablecoin project founded by Coinbase and Circle, has hit a major milestone in market capitalization.

On July 3, 2020, USDC market cap broke the $1 billion threshold for the first time since the stablecoin was launched in October 2018. According to data from Coin360, the coin has seen sharp growth since March 2020.

USDC, the second-largest USD-pegged stablecoin after Tether (USDT), is ranked the 17th largest cryptocurrency by market cap as of press time.

USD Coin all-time chart

USD Coin all-time chart. Source: Coin360

Announcing the news on Thursday, the Centre Consortium — an organization co-founded by Circle and Coinbase — highlighted a number of factors that contributed to USDC’s notable growth. According to Centre, the demand for USDC in 2019 was mainly driven by the progress of the decentralized finance, or DeFi ecosystem.

Three major factors brought rapid growth in 2020

Centre identifies three major developments that pushed the sharp growth of USDC: the coronavirus-fueled financial crisis, the increased demand for low-cost transfers among businesses worldwide, and the impact of massive growth in the Compound protocol, a major DeFi project. Centre added that it anticipates more growth in 2020:

“We expect USDC to continue growing rapidly throughout 2020 and help fulfill Centre Consortium’s mission of establishing an open standard for money on the internet.”

Stablecoins post massive growth over the course of 2020

USDC’s progress comes in line with overall growth in the stablecoin market. Tether, the largest USD-pegged stablecoin, crossed a $10 billion market cap on July 1 — a 144% growth from the start of 2020. The news came soon after Tether overtook major altcoin XRP to become the third largest cryptocurrency by market cap in March.

On June 24, the Centre announced a multi-chain USDC Framework, featuring the Algorand blockchain as the first network to power USDC on another blockchain.