Circle’s dollar-backed stablecoin USDC grew faster than Tether’s USDT again in 2025, extending a trend that was already visible a year earlier. USDC’s market capitalization climbed 73% to $75.12 billion, while USDT added 36% to reach $186.6 billion. In 2024, USDC had also posted a stronger expansion rate, rising 77% compared with 50% for USDT.
The size gap between the two tokens remains wide, but the growth split has become harder to ignore. Together, USDC and USDT account for more than 80% of the $312 billion stablecoin market, showing that smaller tokens have not yet captured much of the benefit from policy changes in the world’s largest economy.
Institutional buyers leaned toward regulated dollars on-chain
Observers tied USDC’s stronger growth to demand from institutions that need products aligned with regulatory rules. As Washington became more open to digital assets, a clearer framework began taking shape for payment stablecoins and digital tokens pegged to monetary value. The report said the GENUIS Act created a comprehensive structure, prompting several major banks and institutions to examine stablecoins, with regulated options such as USDC drawing particular attention.
USDC is backed by cash and short-term U.S. Treasuries held at regulated institutions. Circle, founded in New York in 2013 by Jeremy Allaire and Sean Neville, went public on the New York Stock Exchange last June. In the United States, the company holds money transmission licenses across various states and territories, along with a New York virtual currency license. In Europe, it operates under e-money licenses in key jurisdictions and complies with the MiCA framework after 2024.
Reserve transparency and audits helped its case
JPMorgan analysts wrote in an October note that USDC’s reserve management and regular audits make it more trusted among institutional investors and other regulated entities. They also said compliance with Europe’s Markets in Crypto-Assets framework separates USDC from rivals and supports its position as a preferred stablecoin for financial institutions.
That positioning has shown up in actual usage. Companies including Visa, Mastercard, and BlackRock have integrated or favored USDC, mainly for settlement and treasury operations, giving the token a larger role in regulated financial workflows.
USDT still dominates by size, but regulatory reach is limited
Tether, founded in 2014 and led by CEO Paolo Ardoino, still issues the largest stablecoin by market value. Even so, the report said USDT remains unregulated in the United States and Europe. Tether currently operates as a licensed digital asset service provider in El Salvador. The company did not respond to an emailed request for comment.
In a Friday newsletter, an analyst at FRNT Financial pointed to repeated remarks from U.S. Treasury Secretary Scott Bessent that the stablecoin market could reach $3.7 trillion by the end of the decade. The open question, according to that note, is whether future growth will stay concentrated in USDT and USDC or begin to spread in a meaningful way to other tokens.