Binance recorded US$1.8 billion in net USDC outflows during the second quarter of 2026. Of that amount, approximately US$1.4 billion left the exchange in June, coinciding with growing uncertainty surrounding Binance’s Markets in Crypto-Assets (MiCA) licensing status in the European Union.

According to on-chain wallet data and proof-of-reserves reports from major exchanges, Binance’s USDC balance declined by approximately 19% during the quarter. This drop was significantly larger than the overall 5.5% contraction in USDC supply, equivalent to around US$4.3 billion, over the same period.

However, the outflows did not entirely migrate to Binance’s competitors that have already secured MiCA licenses. OKX also experienced a decline in its USDC balance. Bybit, on the other hand, was the only major exchange to post significant growth.

Binance's USDC Outflows Peaked in June

The analysis was compiled by Wu Blockchain using proof-of-reserves reports from eight centralized exchanges, CoinGecko market capitalization data, and wallet tracking data from DefiLlama.

The data shows that approximately US$400 million in USDC left Binance during April and May 2026. Selling pressure intensified in June, when outflows surged to US$1.4 billion in a single month.

During the same period, the amount of USDC held by Binance users reportedly declined by nearly 10% in just one month. In comparison, the platform's USDT balance remained relatively stable.

The contrast has fueled speculation that Binance’s regulatory challenges in Europe may have influenced users' decisions. Binance previously withdrew its MiCA license application in Greece after the approval process failed to conclude before the regulatory deadline.

MiCA requires crypto asset service providers to obtain authorization from one EU member state before offering services across the European Union. Binance has stated that it continues discussions with regulators in other jurisdictions to obtain a new authorization while reaffirming its commitment to the European market.

The issue follows broader stablecoin regulatory adjustments in the region. Binance had previously delisted several stablecoins in Europe that failed to comply with MiCA requirements.

However, the available data does not prove that all USDC outflows were driven solely by licensing concerns. Some funds were likely redeemed into fiat currencies, transferred to self-custody wallets, or moved to platforms outside the scope of the analysis.

OKX Did Not Capture the Outflows, While Bybit Grew 45%

OKX had been widely expected to become the primary beneficiary of funds leaving Binance because of its stronger regulatory position in Europe. Instead, OKX's USDC balance declined by approximately 9.7% during the second quarter of 2026.

That decrease was slightly larger than the overall 5.5% contraction in USDC supply, suggesting that OKX's balance generally moved in line with broader market conditions rather than benefiting from additional liquidity migrating from Binance.

Bybit showed a different trend. The exchange's USDC balance increased 45%, rising from approximately US$450 million to US$660 million, representing an increase of roughly US$210 million during the quarter.

The growth is believed to be driven by USDC's utility within Bybit's derivatives products. The platform offers USDC-margined perpetual contracts and options, allowing the stablecoin to be used not only as cash reserves but also as trading collateral.

This suggests that product utility may be a stronger driver of liquidity than regulatory compliance alone. As USDC activity has recently surpassed USDT in on-chain transaction activity, Bybit appears to have generated more organic demand through its derivatives ecosystem.

Despite recording the strongest growth among major exchanges, Bybit did not absorb all of Binance's outflows. Its US$210 million increase remains far below Binance's US$1.8 billion in net outflows. Most of the withdrawn USDC was likely redeemed into cash or transferred to exchanges outside the scope of the analysis.

Circle's Incentives Failed to Retain User Balances

Binance and Circle maintain a distribution agreement designed to expand USDC adoption. According to analysis referencing Circle's IPO prospectus, the company paid Binance an upfront distribution incentive of approximately US$60 million.

The agreement also includes monthly incentive payments based on the amount of USDC held using Binance's own capital. As part of the partnership, Binance reportedly agreed to maintain approximately US$1.5 billion in USDC on its balance sheet while promoting USDC trading pairs.

Proof-of-reserves data shows that Binance wallets currently hold approximately US$7.58 billion in USDC, while customer balances total around US$6.98 billion. The roughly US$600 million difference is believed to represent platform-owned funds, including operational capital and reserves associated with the distribution agreement.

This suggests that Circle's incentives may have helped maintain Binance's corporate USDC holdings. However, those incentives were not sufficient to prevent users from withdrawing USDC or redeeming it into local fiat currencies.

These developments come as Europe's stablecoin market continues to evolve. USDC has strengthened its position as a MiCA-compliant stablecoin, while several exchanges have begun removing USDT trading pairs for European users.

Binance Still Dominates the Stablecoin Market

Despite experiencing substantial outflows, Binance remains the dominant holder of stablecoins among centralized exchanges.

Out of approximately US$68.5 billion in stablecoins held across the eight exchanges analyzed, Binance accounts for around US$42.5 billion, or roughly 62% of the total. That figure is approximately 3.7 times larger than OKX's holdings and nearly three times greater than the combined balances of the six smallest exchanges.

Within the USDC market specifically, Binance still holds approximately 80% of all USDC stored on centralized exchanges. Its balance is reportedly eight times larger than that of the second-largest USDC-holding exchange.

As a result, the 19% decline should not be interpreted as the end of Binance's market dominance. Instead, the data reflects changing user behavior and shifting liquidity driven by a combination of regulatory pressure, USDC redemptions, and differences in stablecoin utility across platforms.

Bybit emerged as the biggest relative beneficiary, as it was the only major exchange to record meaningful growth. Even so, the majority of USDC leaving Binance did not flow directly to either Bybit or OKX.

The findings suggest that while MiCA regulations may influence users' platform choices, product utility remains a critical factor. Exchanges that offer meaningful use cases for USDC as trading collateral may prove more effective at attracting liquidity than platforms relying solely on regulatory status or distribution incentives.