Circle reports 30% growth in Kraken-held USDC, but leaves measurement details unclear
Circle says the amount of USDC held in custody on Kraken rose 30% after the companies’ September 2025 partnership. It also says nearly 1 billion EURC has traded on the exchange since listing. The figures suggest broader stablecoin use across Kraken, but Circle has not shared enough detail to assess their scale.
- USDC custody: Circle reports 30% growth but gives no starting or ending balances.
- EURC trading: Nearly 1 billion tokens have traded since listing, according to Circle.
- DeFi Earn: Circle says 350 million USDC went into Kraken vaults after launch.
- What’s missing: The figures do not show current balances, customer returns or how many users took part.
A partnership spanning custody, trading and lending
Kraken and Circle announced their agreement on September 17, 2025. It expanded USDC support, introduced Circle’s euro-denominated stablecoin EURC, lowered conversion fees and added ways to use USDC across Kraken’s services.
Stablecoins are digital tokens designed to track a currency’s value. They let people move funds between crypto platforms and blockchain applications without first converting to traditional bank money. A stablecoin’s intended peg does not remove issuer, operational or market risks.
When the partnership was announced, Mark Greenberg, then Kraken’s global head of consumer business, described stablecoins as “Permissionless, programmable, and global by default.” The latest figures cover activity across several services, but measure different things. They should not be treated as interchangeable evidence of adoption.
Circle says USDC assets under custody on Kraken grew 30% after the partnership began. Assets under custody are assets held or safeguarded for customers. Circle has not shared the starting or ending balances, exact comparison dates or calculation method, so the percentage cannot be independently assessed using the information available.
Circle also says nearly 1 billion EURC has traded on Kraken since the token was listed. That measures trading activity, not the amount of EURC in circulation or the number of unique tokens bought and held. Circle has not specified the listing date, reporting period or methodology behind the figure.
EURC’s exchange reach and supply are separate measures
Circle says EURC launched on Ethereum in June 2022 and was later issued natively on Avalanche, Stellar, Solana and Base. Native issuance means a token is issued directly on a blockchain, rather than existing there only as a representation bridged from another network.
In an update citing figures as of August 13, Circle put EURC outstanding at €402.4 million and said its supply had more than doubled over the previous year. The year for that August date is not specified, so the figure should not be treated as a current supply snapshot. Circle also said about €80 million was circulating at the end of 2024.
Circle lists Bitpanda, Bitstamp, Bybit, Coinbase and Kraken among the exchanges that offer EURC. It also points to EURC/EUR and EURC/USD markets, along with institutional custody and settlement integrations with Cobo, Copper and Fireblocks. These listings and services broaden potential access, but do not show how much liquidity is available on any one venue.
Kraken says eligible clients in the European Economic Area use USDC for margin extensions on dollar-quoted cash pairs and EURC for euro-quoted pairs. In this setup, a stablecoin supports margin trading on a cash order book. For a BTC/EUR order, Kraken says it converts EURC into euros at a one-to-one rate with no conversion fee. The trade stays on the cash order book, and proceeds are converted as needed to close the stablecoin margin extension.
DeFi Earn routes deposits into onchain lending
Kraken launched DeFi Earn on January 26, 2026. The service lets customers allocate cash and supported assets to onchain lending through Kraken’s interface. Onchain lending uses blockchain-based protocols and smart contracts to facilitate lending, rather than relying only on conventional financial intermediaries.
Kraken’s launch materials said funds could be converted to USDC and placed in Veda vaults that supply lending protocols. A vault pools or allocates deposits according to a strategy. Aave Labs described a USDC vault on Kraken’s Ink network supplying liquidity to lending markets such as Aave. Borrower payments can add to the vault’s share value and user rewards.
Kraken named Sentora as the risk manager, responsible for allocations, risk management and liquidity monitoring. It offered three USDC vault options: Balanced Yield, Boosted Yield and Advanced Strategies. The names distinguish the options, but do not tell customers what returns to expect or fully explain how their risks compare.
Circle says 350 million USDC was deposited into DeFi Earn vaults after launch. It has not said whether that figure represents total deposits over time, a balance at a particular moment or another measure. It also does not show how many customers took part, how much remains deposited or what returns users received.
Kraken says rewards accrue continuously and are added to the vault balance. USDC vault rewards are paid in USDC, returns vary with lending-market conditions, and fees come out of earnings. Deposits may be converted into a vault’s base asset, the asset used by that vault. Kraken says standard conversion fees apply when the deposited asset differs from the base asset.
Yield is variable, and losses are possible
DeFi Earn is not a bank deposit with a guaranteed rate. Kraken warns that smart-contract failures, bad debt and market volatility can cause losses, while limited liquidity can delay withdrawals. Bad debt occurs when borrowers fail to repay and lending markets cannot recover the full amount owed. The available product details do not explain how losses would be allocated among vault users.
An exchange interface can make onchain lending easier to access, but it cannot remove the risks of the underlying protocols and strategies. Kraken’s launch announcement listed DeFi Earn as available in 48 U.S. states, excluding New York and Maine, and unavailable in Canada and the European Economic Area. A Kraken support FAQ updated October 15, with no year specified, also lists the UK, Australia and UAE as unavailable. Availability depends on location and may change, so customers should check Kraken’s current terms.
Circle’s proposals for Europe’s stablecoin rules
Separately, Circle has proposed changes to the European Union’s Markets in Crypto-Assets Regulation, or MiCA, which governs crypto-asset markets and stablecoin issuers. In a submission dated October 1, with no year specified, Circle called for changes to cross-border issuance, reserve assets and recognition of stablecoins regulated outside the EU. The European Commission’s plans to expand MiCA rules form part of a wider debate over how the framework applies to tokenization and stablecoins.
Circle proposed replacing fixed bank-deposit thresholds with reserve requirements based on liquidity. It also suggested that the European Commission assess foreign regulatory frameworks, with the European Banking Authority deciding whether to recognize individual issuers. Circle cited the U.S. GENIUS Act’s approach to foreign issuers as a model. These are Circle’s policy recommendations, not adopted EU rules or confirmed regulatory outcomes.
The policy challenge is balancing safeguards with cross-border access. Strict reserve and oversight requirements can support confidence, while inflexible rules may make it harder for regulated issuers to serve multiple markets. The available information does not show whether regulators have responded to Circle’s proposals. Circle’s France EMI license and its EU path under MiCA offer another example of the regulatory route for stablecoin issuers.
Key questions about Circle and Kraken
-
What does Circle’s 30% USDC figure measure?
Circle says USDC assets under custody on Kraken grew 30% after the partnership began in September 2025. It has not disclosed the underlying balances or exact comparison dates.
-
Does nearly 1 billion EURC traded mean that much EURC is in circulation?
No. Trading activity and circulating supply are different measures. Circle has not provided the reporting period or calculation method for the Kraken figure.
-
What does the 350 million USDC DeFi Earn figure establish?
Circle says that amount was deposited after launch, but the basis for the figure is unclear. It does not show current vault balances, customer participation or realized returns.
-
Can customers lose money in DeFi Earn?
Yes. Kraken warns that smart-contract failures, bad debt and market volatility can cause losses. Limited liquidity can also delay withdrawals.
-
Has the EU adopted Circle’s proposed MiCA changes?
No adoption has been established. The changes described are Circle’s proposals, not confirmed EU policy.
Circle’s figures point to activity across Kraken custody, EURC trading and onchain lending. Without clearer reporting periods and balance definitions, though, they show reported activity, not how much remains held, how widely customers use the products or whether DeFi Earn delivered dependable returns.
