Circle Internet’s ( CRCL ) USDC overtook Tether’s USDT in onchain activity, Wall Street bank JPMorgan ( JPM ) said, as investors and institutions moved to adopt stablecoins that met new regulatory standards.
The bank noted that USDC’s market capitalization has risen 72% this year to $74 billion, outpacing USDT’s 32% rise. It reflects a shift towards assets with greater transparency and compliance, it said. USDT remains the largest stablecoin with a market capitalization more than double that of the second-ranked USDC.
Wednesday’s report attributed the deviation to regulatory clarity, particularly Europe’s Markets for Crypto Assets (MiCA), which came into force in mid-2024.
Stablecoins are cryptocurrencies whose value is tied to another asset, such as the US dollar or gold. They play a major role in cryptocurrency markets, providing a 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, analysts led by Nikolaos Panigirtzoglou wrote.
USDC’s on-chain speed also increased, boosted by growth on Solana and Base, two blockchains that drive decentralized finance (DeFi) activity, and by integration with payments giants Visa ( V ), Mastercard ( MA ) and Stripe, the analysts said.
Partnerships with e-commerce and Web3 platforms and Circle’s Cross-Chain Transfer Protocol have further improved the efficiency of 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 future stablecoin development, challenging Tether’s long-held lead.
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