Decline in Tether and Circle's Stablecoin Dominance Signals Market Shift
Tether's USDt and Circle's USDC, the two leading stablecoins, have lost a significant portion of their market share over the past year. The change shows an evolving stablecoin landscape as competition intensifies and new issuers emerge.
Market Share Data Confirms Trend
According to data from DefiLlama and CoinGecko, the joint market share of USDt and USDC fell from a high of 91.6% in March 2024 to 83.6% in June 2025. This marks a 5.4% decline since October 2024 and a 3.4% drop year-to-date. Their combined market cap peaked at $128 billion in early 2024, as the total stablecoin market grew to around $140 billion.
Rise of New Stablecoin Issuers
Industry analyst Nic Carter noted on X that the dominance of USDT and USDC is waning as new competitors enter the field. Carter identified emerging stablecoins such as Sky's USDS, Ethena's USDe, PayPal's PYUSD, and World Liberty's USD1 as examples of fast-growing alternatives. He also mentioned Ondo's USDY, Paxos' USDG, and Agora's AUSD as projects gaining attention.
- Many new stablecoins offer yields or passive income, increasing their appeal to users.
- Ethena's USDe has become a leading example, reaching a supply of $14.7 billion as it passes yield from crypto trading strategies to holders.
Yield and Regulatory Shifts Drive Competition
Yield-bearing stablecoins have attracted users despite regulatory scrutiny. Carter predicts that newer startups will undercut established issuers on yield, intensifying competition. He expects large industry players will continue to explore ways to add yields to major stablecoins such as USDC.
Banks Enter Stablecoin Space
Regulatory changes are also paving the way for banks and financial institutions to issue their own stablecoins. Carter suggests that bank consortia are likely to play a significant role, as no single bank can rival Tether's reach. Recent moves in Europe support this view. In September 2024, Italy's UniCredit and several other banks announced plans to develop a euro-denominated stablecoin. The project, compliant with Europe's regulatory framework, aims for launch in the second half of 2026.
Outlook
The decline in Tether and Circle's market share highlights growing competition and changing market dynamics in the stablecoin sector. The entry of new issuers, yield-bearing coins, and traditional banks suggests further shifts are likely in the coming years.
Related content
Comments
