Digital dollar power balance cracks as Circle’s growth spurt closes in on Tether’s dominance

The stablecoin hierarchy is shifting as Circle's USDC experiences significant growth, challenging Tether's dominance in the digital dollar market. While Tether's USDT still holds the largest outstanding supply (58% market share, around $186 billion in circulation), the contest is moving toward control over the rails for new capital flow. Circle's USDC reached $79 billion, hitting a fresh all-time high after an 8% rise in the last month, while USDT remains below its December 2025 peak. This divergence is evident in transaction volume, where USDC accounted for $18.3 trillion compared to USDT's $13.3 trillion in 2025, suggesting USDC is winning the velocity battle. Tether maintains an edge in exchange distribution and offshore trading liquidity, appealing to users needing dollar assets without local banking reliance. Conversely, Circle's strength lies in its "legibility"—a reserve model and disclosure framework appealing to regulated institutions and banks, aligning with anticipated stricter regulatory frameworks like the GENIUS Act. This suggests a split market: USDT remains the dominant stored crypto cash, while USDC is positioning itself as the preferred token for regulated settlement and institutional adoption, potentially segmenting Bitcoin liquidity based on which stablecoin rails are used.

(Source：CryptoSlate)