Circle Internet’s (CRCL) USDC has surpassed Tether’s USDT in on-chain activity, according to Wall Street bank JPMorgan (JPM), as investors and institutions increasingly adopt stablecoins that align with emerging regulatory guidelines.
The bank highlighted that USDC’s market capitalization has increased by 72% this year, reaching $74 billion, while USDT has risen by 32%. This trend signifies a movement towards assets that offer better transparency and regulatory compliance. Despite this, USDT continues to be the largest stablecoin with a market cap that is more than double that of USDC.
The report released on Wednesday linked this shift to regulatory clarity, particularly referencing Europe’s Markets in Crypto-Assets (MiCA) framework that came into effect in mid-2024.
Stablecoins are cryptocurrencies whose values are pegged to other assets, like the U.S. dollar or gold. They play a crucial role in the cryptocurrency ecosystem, offering a payment infrastructure and serving as a means of transferring money internationally.
USDT’s lack of MiCA authorization has led to its exclusion from various European exchanges. Meanwhile, USDC’s commitment to regulatory compliance, transparent reserves, and routine audits has enhanced its attraction among institutional users, as noted by analysts led by Nikolaos Panigirtzoglou.
The on-chain activity of USDC has also increased, driven by growth on platforms like Solana and Base, which are pivotal in the decentralized finance (DeFi) sector, as well as partnerships with payment leaders Visa (V), Mastercard (MA), and Stripe, the analysts stated.
Collaborations with e-commerce and Web3 platforms, along with Circle’s Cross-Chain Transfer Protocol, have improved its efficiency for payment and settlement processes.
While USDT remains a key player in emerging markets as the preferred trading pair on exchanges, JPMorgan suggests that USDC’s regulated approach could establish a global benchmark for the future development of stablecoins, positioning it as a contender to Tether’s long-held dominance.
Read more: Investment Bank Mizuho Says Visa Is Becoming the ‘Stablecoin of Stablecoins’
