Circle Internet’s dollar-pegged stablecoin, USDC, outpaced larger rival Tether’s USDT for the second consecutive year in 2025, driven by increasing demand for regulated, blockchain-based dollars as the U.S. government became more open to digital assets.
USDC’s market cap surged by 73% to $75.12 billion, while USDT grew by 36% to $186.6 billion, as reported by CoinDesk. In 2024, USDC’s growth was 77%, compared to USDT’s 50%.
Founded in 2013 by Jeremy Allaire and Sean Neville and based in New York, Circle went public on the New York Stock Exchange (NYSE) last June. USDC is backed by cash and short-term U.S. Treasuries held at licensed institutions.
In the U.S., Circle holds money transmission licenses across various states and territories, alongside a virtual currency license in New York. In Europe, it adheres to the MiCA framework post-2024 and operates under e-money licenses in key jurisdictions.
Conversely, Tether’s USDT is unregulated in both the U.S. and Europe. Established in 2014 and led by CEO Paolo Ardoino, the company functions as a licensed digital asset service provider in El Salvador. Tether did not reply to an email seeking comment.
Trust Factor
Observers noted that USDC’s success is attributed to institutional demand for assets aligned with regulatory standards.
Passed recently, the GENUIS Act established a framework for payment stablecoins and digital tokens pegged to monetary value for transactions. This prompted numerous prominent investment banks and institutions to consider stablecoins, especially those that are regulated like USDC.
The token has been actively adopted by companies such as Visa, Mastercard, and BlackRock, mainly for settlement and treasury functions.
Analysts at JPMorgan mentioned in an October note that “USDC’s transparent reserve management and regular audits enhance its trustworthiness among institutional investors and other regulated entities.”
They further stated, “Moreover, its compliance with frameworks like the Markets in Crypto-Assets (MiCA) regulation in Europe distinguishes it from competitors, making USDC the preferred stablecoin for financial institutions.”
Together, USDC and USDT represent over 80% of the total stablecoin market valuation of $312 billion, indicating that other tokens have yet to capitalize on regulatory changes in the largest economy.
According to an analyst at FRNT Financial, “Treasury Secretary Scott Bessent has consistently asserted that the stablecoin market could expand to USD 3.7 trillion by the decade’s end. It remains to be seen whether stablecoin growth will be limited to USDT and USDC or broaden meaningfully to include other tokens,” in a Friday newsletter.
“Nonetheless, crypto advocates are optimistic that the proliferation of stablecoins will attract new capital and users into the crypto ecosystem in 2026,” they added.
