Circle Internet’s (CRCL) USDC overtook Tether’s USDT in on-chain activity, Wall Street bank JPMorgan (JPM) said, as investors and institutions moved to adopt stablecoins that met emerging regulatory standards.
The bank noted that USDC’s market capitalization has increased 72% this year to $74 billion, outpacing USDT’s 32% increase. That reflects a shift toward assets with greater transparency and compliance, he said. USDT remains the largest stablecoin, with a market capitalization more than double that of second-place USDC.
Wednesday’s report attributed the divergence to regulatory clarity, particularly Europe’s Markets for Crypto Assets (MiCA) framework, which came into force in mid-2024.
Stablecoins are cryptocurrencies whose value is pegged to another asset, such as the US dollar or gold. They play an important role in the cryptocurrency markets as they provide payment infrastructure and are also used to transfer money internationally.
USDT’s lack of MiCA authorization led to its removal from several European exchanges, while USDC’s regulatory compliance, transparent reserves and regular audits strengthened its appeal among institutional users, wrote analysts led by Nikolaos Panigirtzoglou.
USDC’s on-chain velocity also increased, driven by the growth of Solana and Base, two blockchains powering decentralized financial (DeFi) activity, and by integration with payments giants Visa (V), Mastercard (MA) and Stripe, analysts said.
Partnerships with e-commerce platforms and Web3 and Circle’s cross-chain transfer protocol have further improved its efficiency for payments and settlements.
While USDT remains dominant in emerging markets as the leading trading pair on exchanges, JPMorgan said USDC’s regulated model could set the global standard for the future development of stablecoins, challenging Tether’s long-standing leadership.
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