Circle Internet’s (CRCL) dollar-pegged stablecoin, USDC, grew faster than bigger rival Tether’s USDT for the second year in a row in 2025, driven by rising demand for regulated, blockchain-based dollars as the US government warms to digital assets.
USDC’s market cap rose 73% to $75.12 billion, while USDT added 36% to $186.6 billion, according to CoinDesk data. By 2024, USDC grew by 77% compared to USDT’s 50%.
Circle Internet, based in New York, was founded in 2013 by Jeremy Allaire and Sean Neville and went public on the New York Stock Exchange (NYSE) last June. The USDC is backed by cash and short-term US Treasury bonds held at regulated institutions.
In the United States, Circle holds money transmission licenses in various states and territories, as well as a virtual currency license in the state of New York. In Europe, it complies with the post-2024 MiCA framework and operates under e-money licenses in key jurisdictions.
Tethers USDT remains unregulated in the US and Europe. Founded in 2014 and led by CEO Paolo Ardoino, the company operates as a licensed digital asset provider in El Salvador. Tether did not respond to an emailed request for comment.
Confidence factor
USDC’s outperformance appears to be rooted in institutional demand for assets that meet regulatory guidelines, observers noted.
The GENUIS Act created a comprehensive framework for payment stable coins and digital tokens linked to monetary value and intended for payments. That prompted several high-profile investment banks and institutions to explore stablecoins, especially regulated ones such as USDC.
For example, the token has been actively integrated and preferred by companies including Visa, Mastercard and BlackRock, primarily for settlement and treasury operations.
“The USDC’s transparent reserve management and regular audits make it more credible among institutional investors and other regulated entities,” analysts at JPMorgan said in an October note.
“Additionally, its compliance with frameworks such as the Markets in Crypto-Assets (MiCA) regulation in Europe sets it apart from competitors, making USDC the stablecoin of choice for financial institutions,” they added.
USDC and USDT together account for over 80% of the total stablecoin market capitalization of $312 billion, a sign that other tokens have yet to benefit from regulatory developments in the world’s largest economy.
“Finance Minister Scott Bessent has repeatedly stated that the stablecoin market could grow to USD 3.7T by the end of the decade. In this context, it remains to be seen whether stablecoin growth will remain limited to USDt and USDC, or will expand meaningfully to other tokens,” says analyst at FRNT Financial in a Friday newsletter.
“Nevertheless, crypto supporters are optimistic that stablecoin proliferation will bring new capital and users into the crypto ecosystem by 2026,” they added.
