7 months ago
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Over the years, Tether’s USDT has dominated the industry as the preferred stablecoin among its pairs, trading as the third largest crypto after Bitcoin and Ethereum, with a market capitalization of $110.64 billion.
Despite being the largest stablecoin in the crypto industry with a market share of 69%, Tether’s USDT has been overtaken by Circle’s USDC as the top stablecoin in terms of transaction volume.
According to Visa’s adjusted stablecoin metric, launched earlier this year in partnership with Allium Labs to provide a more accurate representation of the stablecoin market, USDC has been steadily gaining traction since the beginning of this year.
The tool designed to eliminate potential distortions arising from inorganic activities and artificial inflationary practices in the stablecoin sector shows that USDC recorded a total of $456 billion in transaction volume last week while Tether’s USDT has only seen $89 billion since January, showing a significant shift in the market dynamics.
USDC Dominates with 50% Market Share
Over the years, Tether’s USDT has dominated the industry as the preferred stablecoin among its pairs, trading as the third largest crypto after Bitcoin (BTC) and Ethereum (Ether), with a market capitalization of $110.64 billion.
However, since 2024, USDC has gained massive traction, flipping the digital asset to become the largest stablecoin in terms of transaction volume. USDC recorded over 50% of total stablecoin transactions in the industry to date.
Although Visa did not offer specific insights into the factors behind the increased usage of USDC, Noelle Acheson, the author of the “Crypto Is Macro Now” newsletter, pointed out that the difference in adoption rates between the two stablecoins may be due to USDT’s widespread use as a dollar-backed reserve outside the United States.
Conversely, USDC is more commonly used within the US, especially for daily transactions and payments.
Circle Boosts USDC Stablecoin Adoption with Partnerships
The surge could also be attributed to the recent partnership with USDC Issuer Circle Financials and Stripe, a prominent payment giant in the US, to facilitate the use of USDC for payments.
The collaboration is believed to threaten USDT’s dominance, especially given the company’s robust presence in eCommerce. In 2023, Stripe announced processing more than $1 trillion in transactions alone.
In addition to Stripe, Circle has expanded its business offerings to the Japanese market, exposing the stablecoin to more people in the Asia Pacific region. The expansion was facilitated through a partnership with Coincheck Inc, a fintech company headquartered in Tokyo, Japan, in February of this year. The recent partnerships highlight the growing adoption of USDC, positioning it as a leader in the global stablecoin market.
