THE CASE FOR STABLE-COINS

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Introduction

In the fast-paced and often volatile world of cryptocurrency, stablecoins stand out as the assets everyone — from individual traders to multinational institutions — loves to use. Designed to maintain a steady value (pegged 1:1 to a fiat currency like the U.S. dollar), stablecoins solve many of the pain points associated with volatile crypto assets. They provide predictable pricing for trading, allow for faster and cheaper money transfers across borders, and extend a form of “digital dollar” to parts of the world where banking services are minimal or unreliable.

At the center of the stablecoin universe sits Tether (USDT). The crucial importance for a stablecoin like Tether to be the currency of choice in developing countries resides in its lack of volatility; a stable exchange rate to the dollar engenders pricing stability. This, in turn, creates:

  1. Acceptability (widespread).
  2. Consensus (tacit adoption).
  3. Functionality (usefulness, easiness).
  4. Trust (as a means of payment).

Despite growing competition, Tether remains the largest stablecoin in circulation. Its market share, while it has faced challenges and dipped in certain months, still dwarfs that of its closest rivals. Understanding how Tether became so dominant — and why stablecoins are critical for the broader crypto ecosystem — sheds light on a crucial driver of U.S. dollar influence around the globe.

Stablecoins: The Backbone of Crypto Trading

One of the biggest criticisms of cryptocurrencies such as Bitcoin or Ethereum is their price volatility. A single Tweet or economic announcement can move prices by double digits in a day. For traders, businesses, or everyday users who simply want to make or receive payments without worrying about wild swings, this volatility is untenable.

Enter stablecoins. Pegged 1:1 to the dollar (or another fiat currency), a stablecoin like USDT or USDC remains at — or very close to — one dollar. This stable pricing:

  1. Facilitates Crypto Trading.
    Traders can quickly move in and out of crypto positions without going through slower bank transfers. Stablecoins allow for near-instant settlements any time of day, anywhere in the world.
  2. Acts as a Crypto ‘Savings Account.’
    In high-inflation regions (e.g., parts of Latin America, Turkey, or Africa), many people view dollar-backed stablecoins as a lifeline to store value more reliably than their local currency.
  3. Powers DeFi and Cross-Border Payments.
    Decentralized finance (DeFi) protocols rely heavily on stable assets for lending, borrowing, and liquidity pools. Similarly, cross-border remittances are simpler and cheaper with stablecoins than with wire transfers or traditional money remitters charging high fees.

Ultimately, stablecoins can be viewed as an extension of the U.S. dollar itself. Wherever they take off, the dollar’s dominance deepens, because local users measure wealth and transact in digital dollars rather than their often-volatile local currencies.

Tether’s Global Reach

Although Tether is nominally anchored to the U.S. dollar, its greatest usage occurs outside the United States. During a recent interview at “Crypto Investor Day” in October 2024, Tether CEO Paolo Ardoino explained that in the U.S. or Europe, consumers already have ample ways to transact digitally — PayPal, Venmo, credit cards, and so on. Tether focuses instead on regions with high inflation, capital controls, or limited banking access, where people are desperate for a stable alternative to the local currency:

  • Turkey: The Lira has dropped drastically against the dollar, fueling enormous Tether usage.
  • Argentina: With inflation in the double or triple digits, Argentines often hold USDT to preserve value.
  • Nigeria: Capital controls and difficulty accessing formal banking channels have made Tether a top choice.
  • China (off-exchange markets): Even though crypto trading is officially prohibited, USDT remains widely used for peer-to-peer transactions and cross-border fund flows.

In some cases, Tether’s rapid growth correlates directly with what Ardoino calls the “failure of many economies.” As local currencies crumble, people turn to Tether’s digital dollar for refuge.

From a regulatory standpoint, that popularity can be controversial — particularly in countries that do not want to see their citizens bypass capital controls by holding a dollar-pegged token. Yet the fact remains: people will choose the most stable, globally accepted currency they can access. In this role, Tether helps funnel more global users into the orbit of the U.S. dollar.

Given this broad global footprint, Tether’s leadership has also stepped up its engagement with Western regulators.

Dominating the Market

​As of February 2025, Tether’s USDT and Circle’s USDC are the two largest stablecoins by market capitalization, collectively dominating the stablecoin market. Here’s a breakdown of their individual and combined market shares:​

1. Tether (USDT):

  • Market Capitalization: Approximately $143 billion.
  • Market Share: Approximately 61% of the total stablecoin market. ​

2. Circle (USDC):

  • Market Capitalization: Approximately $56.3 billion. ​
  • Market Share: Approximately 24% of the total stablecoin market. ​

Combined Market Share:

  • Total Market Capitalization: Approximately $199.3 billion.​
  • Combined Market Share: Approximately 85% of the total stablecoin market.

On March 2025: U.S. Engagement & Policy Outreach

In March 2025, Tether’s CEO, Paolo Ardoino, made his first-ever trip to the United States, attending in Washington, D.C., a CFTC forum about a pilot project on “digital asset markets pilot program for tokenized non-cash collateral” (as the agency’s acting chairman described it). In New York City, he was the keynote speaker at The Cantor Fitzgerald Global Technology Conference; Ardoino also spoke on Bloomberg about Tether’s evolving role in supporting the U.S. dollar. He highlighted that while Tether has always maintained strong ties with emerging markets, American regulatory clarity would “pave the way” for stablecoins to more deeply integrate with traditional finance. Ardoino also emphasized Tether’s vast user base outside the U.S., arguing that stablecoins extend the dollar’s global influence to regions where local banking systems fall short. By meeting with lawmakers in Washington, D.C., Ardoino signaled Tether’s willingness to engage openly with U.S. authorities — further underscoring that Tether’s fortunes, and the dollar’s continued dominance, increasingly depend on each other.

CFTC Digital Asset Pilot Program: A Game-Changer for Stablecoins?

​The CFTC digital asset markets pilot program for tokenized non-cash collateral is likely to have significant implications for stablecoins like USDT (Tether) and USDC (Circle) in multiple ways:

1. Potential Recognition as Acceptable Collateral

  • If the CFTC includes stablecoins in its pilot for tokenized non-cash collateral, it could signal a regulatory green light for their use in regulated derivatives markets.
  • This would increase the legitimacy and institutional adoption of USDT and USDC, allowing them to be used as margin in futures and options trading.

2. Enhanced Regulatory Scrutiny

  • If stablecoins are considered as collateral, they would likely be subject to greater transparency requirements.
  • The CFTC and SEC may require issuers (Tether, Circle) to increase disclosures regarding reserves, audits, and backing of their stablecoins.
  • Algorithmic or undercollateralized stablecoins (e.g., DAI, FRAX) might struggle under stricter collateral rules.

3. Increased Institutional Use of Stablecoins

  • If stablecoins can be used as non-cash collateral, institutions may increase their holdings of USDT and USDC.
  • This could drive higher liquidity in both traditional financial markets and DeFi.

4. Potential Shift Towards Regulated Stablecoins

  • The pilot program could favor fully regulated stablecoins such as USDC over USDT, given USDC’s compliance track record with U.S. regulators.
  • This might pressure Tether to increase its transparency efforts or risk being sidelined in regulated U.S. markets.

5. Competition with Central Bank Digital Currencies (CBDCs)

  • If stablecoins become widely accepted as collateral in regulated derivatives markets, they could compete with potential CBDCs like a digital dollar.
  • This could influence future regulations on stablecoins, with potential restrictions or enhanced oversight to balance their influence against government-backed digital currencies.

Conclusion

The CFTC’s pilot program could be a game-changer for stablecoins like USDT and USDC, particularly if they become recognized as legitimate financial instruments in regulated markets. However, regulatory clarity, compliance, and reserve transparency will determine which stablecoins benefit the most.

Tether’s Unprecedented Turnaround: Government Partnerships & Strategic Investments

This global adoption has prompted Tether to rethink its positioning, giving rise to a new approach in partnerships and investments. Since 2023, Tether has engaged in significant efforts to transform its public image, strengthen relationships with global regulators, and expand into new business lines. These actions mark a remarkable pivot from Tether’s earlier, more combative era:

  1. Settling Regulatory Scrutiny in New York.
    After extended scrutiny by the New York Attorney General’s office (Letitia James), Tether reached a settlement clarifying its disclosures and operational safeguards. Though stringent, the outcome helped Tether move forward with greater transparency — an important milestone in rebuilding regulatory trust.
  2. Building Bridges with the U.K. Government.
    Tether has engaged London-based financial advisors and has publicly committed to working within future U.K. stablecoin frameworks. This open stance has gained it cautious acceptance, a contrast to earlier fears Tether would be locked out of Europe.
  3. Hiring Cantor Fitzgerald as Fund Manager.
    In a strategic move, Tether appointed Cantor Fitzgerald — a storied Wall Street firm — as its core fund manager for a large portion of Tether’s U.S. Treasuries. This partnership added a layer of institutional credibility and aligned Tether’s interests more closely with the U.S. financial establishment.
  4. Cantor CEO’s Appointment to U.S. Secretary of Commerce.
    Cantor Fitzgerald’s CEO, having nurtured close ties with Tether, was selected as Secretary of Commerce in the new U.S. administration. While the optics raised eyebrows, Tether’s role as a major purchaser of U.S. Treasury bills has evidently helped it forge influential alliances in Washington.
  5. Acquiring 40% of Rumble.
    Tether purchased a significant stake in the U.S. media platform Rumble, further embedding itself into American corporate and technological ecosystems. This acquisition reflects Tether’s push into media, data, and streaming technology — sectors that broaden its reach beyond just finance.
  6. Largest Holder of U.S. Treasuries Among Private Companies.
    Tether ranks among the top buyers of U.S. Treasuries globally — on par with, and in some cases surpassing, entire national central banks. Participating in Treasury auctions directly benefits the U.S. government’s ability to raise capital, securing Tether a friendlier reception among policy makers.
  7. Major Investments in AI and Next-Gen Tech.
    Beyond stablecoins, Tether has partnered with leading Silicon Valley VCs to invest in cutting-edge AI startups. This proactive pivot showcases Tether’s willingness to diversify and tap into growth sectors that can further drive mainstream adoption of digital assets.
  8. Founding the World’s Largest Bitcoin Mining Operation.
    In a blockbuster move, Tether became 80% owner of a colossal Bitcoin mining facility, reinforcing its pro-Bitcoin stance. This venture not only strengthens Tether’s position in the crypto ecosystem but also gives Tether hands-on influence over Bitcoin’s infrastructure — a strategic hedge against regulatory or market shifts.

Collectively, these moves represent a sweeping change in Tether’s corporate posture. Rather than relying solely on offshore status and crypto-native adoption, Tether is actively courting regulators, investing in mainstream businesses, and growing its footprint in the American financial system. This transformation underpins Tether’s stability and further cements its role in amplifying the dollar’s global dominance.

Insights from the Tether CEO Interview

In an October 2024 remote interview with Anthony Pompliano at The Crypto Investor Day Conference, Paolo Ardoino offered a candid look at Tether’s strategy and outlook:

  1. Focus on Financial Inclusion.
    Ardoino noted billions globally are unbanked or live under high inflation. Tether, he says, offers a “lifeline” for these users — one that local banks simply do not provide.
  2. Explosive “On-Chain” Growth.
    Tether sees over 30 million new on-chain wallets per quarter, a number Ardoino himself called “almost insane.” This figure does not include people using Tether on centralized exchanges.
  3. Institutional Adoption.
    Increasingly, institutions use stablecoins like Tether for cross-border trade, commodity financing, and faster settlement. These use cases are growing as companies realize stablecoins move faster and more transparently on blockchains than traditional bank wires.
  4. Path to Bitcoin.
    Tether’s leadership openly endorses Bitcoin’s ideals. Tether often serves as a steppingstone: people adopt USDT first, get comfortable with blockchain wallets, and then may eventually discover and hold Bitcoin.
  5. No Plans to Go Public.
    Despite Tether’s enormous profitability from interest on reserves, Ardoino believes going public would “impair [their] ability to move fast and be disruptive.” Tether’s leadership prefers the freedom of staying private — especially because it sees itself as part of a bigger mission than just “making a profit.”

An Extension of the U.S. Dollar

Despite Tether’s offshore status, it has become one of the largest holders of U.S. Treasuries on the planet — effectively mobilizing “retail dollars” from across Africa, Latin America, and Asia into American debt. When individuals trade in their local currency to buy Tether, Tether’s reserve managers purchase a corresponding amount of U.S. Treasuries (plus other assets) to back those tokens.

Rather than rely on a single, centralized sovereign wealth fund or foreign government buyer, Tether aggregates millions of tiny buyers all over the world. As Ardoino puts it, this “decentralizes” the decision-making around buying or selling U.S. debt. So, ironically, Tether’s success (despite some regulatory scrutiny) still bolsters the U.S. dollar’s hegemony.

Insights from the Chairman Interview

Likewise, in a February 2025 interview with The Wall Street Journal, Tether Chairman and co-founder Giancarlo Devasini shared insights that further illuminated Tether’s evolving strategy. He emphasized the company’s long-standing commitment to Bitcoin while reaffirming Tether’s mission to reach underserved communities worldwide. Devasini’s comments complemented Ardoino’s, underscoring how a stable, dollar-pegged token can act as both a catalyst for financial inclusion and a driving force behind Bitcoin’s broader adoption.

With both executives’ perspectives in mind, Tether’s leadership collectively underscores the importance of stable, dollar-pegged tokens as both catalysts for financial inclusion and drivers of Bitcoin’s broader adoption.

The Bitcoin Connection: Why Paolo & Giancarlo Are Die-Hards

At the heart of Tether’s success — and part of its appeal to crypto purists — lies the unwavering belief of CEO Paolo Ardoino and co-founder Giancarlo Devasini, recently appointed Tether’s Chairman, in Bitcoin as the ultimate digital asset. Both executives trace their earliest crypto convictions back to Bitcoin’s ethos of censorship resistance, financial sovereignty, and mathematical certainty. For them, Bitcoin stands as a near-perfect store of value, while Tether functions as the dominant means of payment in the crypto realm.

The synergy is straightforward but powerful: Tether’s stable dollar-pegged tokens offer global users a safe harbor against local currency volatility, and once those users become comfortable with digital wallets, they often venture into holding Bitcoin — the original, decentralized reserve asset. By nurturing a user base that sees Tether and Bitcoin as complementary rather than competing, Paolo and Giancarlo have effectively championed a two-pronged monetary system: USDT as the “spendable” currency for everyday transactions, and BTC as the “hard money” for long-term wealth preservation.

This alignment is further boosted by Tether’s extensive Bitcoin mining investments, which ensure both stablecoins and BTC share a robust, vertically integrated ecosystem. In essence, Tether and Bitcoin reinforce each other’s roles as means of payment and store of value — a synergy that is now fueling crypto adoption in virtually every corner of the planet.

A Dynamic and Complementary Executive Team

One of Tether’s defining strengths is the diverse yet complementary perspectives of its top leadership — particularly CEO Paolo Ardoino and co-founder Giancarlo Devasini. Paolo, with his deeply mission-driven ethos, envisions Tether as a vehicle of financial inclusion, bridging unbanked communities to the global digital economy. Giancarlo, in contrast, embodies a strategic and fiercely competitive outlook, focused on long-term independence, alternative infrastructure investments, and global expansion.

Far from sparking discord, their differences in style and emphasis serve as a testament to Tether’s multifaceted nature: a stablecoin that, on one side, fosters social impact and everyday usability, and on the other, safeguards against regulatory overreach and competitive threats. This duality has helped Tether adapt to rapidly shifting market conditions, forge powerful partnerships, and remain the world’s dominant stablecoin — even amid fierce regulatory scrutiny and industry turbulence.

The Rivalry With Circle

If Tether is the swashbuckling outsider, its American rival Circle (issuer of USD Coin, USDC) is the well-dressed insider courting lawmakers and large financial institutions. Over the past few years:

  • Circle has testified before Congress, pushed for stablecoin-specific regulation, and published detailed auditedstatements from major firms like Deloitte.
  • Tether provides only periodic attestations rather than full audits, relies on offshore structures, and has been dogged by critics alleging it helps criminals move money secretly.

A February 2025 Wall Street Journal report laid out how Circle CEO Jeremy Allaire is pushing for stablecoin issuers to hold reserves in U.S.-regulated banks and comply with stricter transparency laws — moves that would favor Circle’s more traditional approach but potentially harm Tether, which issues its tokens offshore.

Yet Tether is significantly larger by market share. It reported a massive profit in the past year and points to Circle’s own vulnerabilities, such as when USDC temporarily lost its peg in 2023 due to exposure to Silicon Valley Bank. Both companies are pushing for global adoption of their respective stablecoins — but with starkly different philosophies on compliance and regulation.

Why Stablecoins Remain Indispensable

  1. Rapid Settlement & High Liquidity.
    Crypto exchanges worldwide rely on stablecoins for near-instant trades and 24/7 liquidity.
  2. Gateway to Global Finance.
    Unbanked or underbanked people can transact in dollars without a local bank account — just a smartphone and internet connection.
  3. DeFi Building Block.
    From decentralized exchanges to lending protocols, stablecoins fuel a range of financial products that would be impossible (or far slower and costlier) with traditional banking infrastructure.
  4. Dollar Dominance.
    Every USDT in circulation is another user effectively holding U.S. dollars, not local fiat. This expansion of “dollarization,” albeit digital, extends American monetary power.

Looking Ahead

Legislators in the U.S., European Union, and elsewhere continue wrestling with how to regulate dollar-backed stablecoins. Major proposals would subject issuers to strict rules on reserve composition, transparency, and where they can legally operate. Tether’s leadership contends it is already well-capitalized and that heavy-handed regulations risk driving innovators — and whole markets — underground or overseas.

Circle, meanwhile, has built an extensive lobbying presence and a large network of traditional financial partners, hoping laws will codify the advantage of fully regulated stablecoins. Tether’s leadership counters that stablecoins first took off precisely because of friction in the banking sector — and that overregulation could once again leave billions of unbanked people without an easy dollar gateway.

Despite any friction among rivals, one thing is clear: stablecoins are here to stay. Their ever-growing user bases and consistent trading volumes have made them indispensable to the crypto ecosystem. And far from undermining the dollar, they are turbocharging its role as a global reference currency — even in places Washington never dreamed it would reach.

Conclusion

Stablecoins like Tether have brought the U.S. dollar directly to millions worldwide, acting as a stable foundation in the midst of economic turmoil and fueling a range of new crypto-based financial services. Tether remains the market leader because of its vast liquidity, first-mover advantage, and unrelenting popularity in emerging markets.

Over the past two years, Tether’s collaborations with governments, major investments in cutting-edge sectors, and significant stake in U.S. Treasuries represent a radical shift in the company’s approach — one that further cements Tether’s standing as a crucial partner in dollar-based finance. Meanwhile, its devotion to Bitcoin aligns Tether with the most decentralized, trust-minimized asset in crypto — ensuring Tether’s stablecoins and Bitcoin remain central pillars of the digital economy.

As lawmakers grapple with the appropriate oversight of dollar-backed tokens, the tension between Tether’s more freewheeling origins and Circle’s regulated approach will shape the future of the crypto industry. Whichever path regulators choose, the broader impact is unmistakable: stablecoins are not only better for trading — they are accelerating global dollarization and redefining what it means to hold, move, and transact in U.S. dollars. In effect, Tether has become an unofficial ambassador for the dollar, extending its reach into markets once considered beyond Washington’s influence.

Erasmus Cromwell-Smith.
March 23rd, 2025.

Apendix:

Standing on Solid Ground

As of February 2025, the reported reserves for Tether (USDT) and Circle (USDC) are as follows:​

Tether (USDT):

  • Total Reserves: Approximately $143.7 billion.​
  • Breakdown of Reserves:
  • $118.335 billion in cash and cash equivalents, primarily U.S. Treasury bills.​
  • $5.3 billion in precious metals.​
  • $7.8 billion in Bitcoin holdings.​
  • $8.1 billion in secured loans.​
  • $3.9 billion in other investments.​

These figures indicate that Tether has a surplus of approximately $7.087 billion over its liabilities. ​

Circle (USDC):

  • Total Circulation: Approximately $56.1 billion.​
  • Total Reserves: Approximately $56.4 billion.​
  • Breakdown of Reserves:
  • $6.9 billion in cash held at reserve banks.​
  • The majority of the reserves are held in the Circle Reserve Fund, an SEC-registered government money market fund managed by BlackRock, which holds a portfolio of short-dated U.S. Treasuries, overnight U.S. Treasury repurchase agreements, and cash. ​

These figures confirm that Circle’s reserves fully back the USDC in circulation. ​

Therefore, the reported figures of more than $140 billion for Tether and $40 billion for Circle in cash or liquid instruments as of February 2025 are consistent with available data, with Circle’s reserves actually exceeding $56 billion.

Regulatory Developments

Regulatory actions and proposals have had a major impact on the stablecoin landscape. A clear example was the case of BUSD: In February 2023, the New York Department of Financial Services ordered Paxos (BUSD’s issuer) to stop minting BUSD, and the U.S. SEC issued a Wells notice suggesting BUSD might be an unregistered security. This regulatory clampdown directly caused BUSD’s market cap to shrink rapidly as redemptions mounted​. The incident sent a warning to other issuers and stirred up stablecoin rivalry as BUSD’s ~$16B user base sought alternatives​. More broadly, U.S. regulators have yet to finalize comprehensive stablecoin legislation (efforts have been debated in Congress), but enforcement actions have created de facto guidelines. For instance, the SEC charged Terra’s creators after the TerraUSD collapse, signaling that algorithmic stablecoins might face legal scrutiny. The absence of clear U.S. rules in 2023–2024 led companies like Circle (USDC’s issuer) to preemptively increase transparency — e.g. publishing detailed reserve reports and holding cash reserves with regulated financial institutions — to appease regulators and users. Notably, in mid-2024 Paxos received confirmation that the SEC dropped its enforcement inquiry into BUSD​, but by then BUSD was already largely out of circulation.

Outside the U.S., regulators are also shaping the market. In the European Union, the new MiCA (Markets in Crypto-Assets) regulation was passed in 2023 and began rolling out in 2024. MiCA introduces strict oversight for stablecoin issuers (termed “EMTs” for e-money tokens) — including capital requirements, reserve audits, and even volume capson non-euro stablecoins used in payments​. These rules, fully effective by end of 2024, mean that leading dollar stablecoins like USDT and USDC must seek EU authorization and could face limits on how widely they can be used within Europe. This push for compliance and transparency is generally forcing stablecoin providers to raise their standards globally. Issuer licensing (e.g. as trust companies or under banking supervision) is becoming the norm — Circle, for example, secured licenses in various jurisdictions, and PayPal partnered with regulated Paxos to launch its own stablecoin (PYUSD) in a fully supervised manner​. Overall, regulatory developments are a double-edged sword: on one hand, crackdowns (like on BUSD or on risky algo-stables) have caused short-term disruptions and consolidation in favor of the largest, most compliant players. On the other hand, clearer rules (as with MiCA or proposed U.S. frameworks) are expected to legitimize stablecoins further, encouraging more institutional participation in the long run. Issuers that embrace transparency and oversight (such as USDC’s team) have arguably been rewarded with restored market share, whereas those in regulatory gray areas (e.g. Tether in the past) still face scrutiny despite their growth.

Adoption Trends and Institutional Use Cases

Stablecoins have seen explosive adoption over the past year, underpinning a huge portion of crypto trading and finding growing use in payments. In fact, the transaction volumeflowing through stablecoins is staggering — by some estimates, on-chain stablecoin transfers reached $27.6 trillion in 2024, surpassing the combined volume of Visa and Mastercard​. This statistic highlights that stablecoins are no longer just niche crypto tokens, but are being used at scale for moving value. A major driver of this usage is the role of stablecoins as the “liquidity backbone” of crypto markets. Traders and investors worldwide use USDT, USDC, etc., as dollar substitutes to quickly enter and exit positions 24/7 without relying on banks. The result is that stablecoins often dominate trading pair volumes and sit as “dry powder” on exchanges ready to deploy​.

Beyond trading, real-world adoption of stablecoins is rising, particularly in cross-border finance. In emerging economies facing high inflation or limited banking access, people have turned to stablecoins as a financial lifeline. For example, in parts of Latin America, the Middle East, and Africa, stablecoins are used for remittances, allowing migrant workers to send money home faster and cheaper than via traditional remittance services​. They also serve as a dollarization tool — providing a safe store of value in USD for populations whose local currencies are depreciating​. Businesses in these markets utilize stablecoins to settle international trades without needing correspondent banks. According to recent analyses, stablecoin usage has grown so much in some regions that, by late 2024, stablecoins accounted for 43% of transaction volume in Sub-Saharan Africa’s crypto sector (a sign of heavy use for payments and savings)​. This grassroots adoption is driven by the appeal of a 24/7 accessible, inflation-resistant digital dollar.

Importantly, institutional adoption is also underway, further boosting stablecoin credibility. A notable example is Visa’s integration of USDC: in 2023, Visa announced it is settling transactions in USDC stablecoin over blockchain networks (Ethereum and Solana) for cross-border payments​. In pilot programs with payment processors like Worldpay and Nuvei, Visa enabled merchants to receive USDC instead of fiat, greatly speeding up settlement times​. This move — one of the first by a major credit network — demonstrates how stablecoins are entering mainstream payment infrastructure. Similarly, fintech giant PayPal’s launch of PYUSD in 2023 showed that payment companies see stablecoins as the future of digital money. On the investment side, asset managers have gotten involved: BlackRock’s aforementioned BUIDL token (essentially a tokenized money market fund) indicates that traditional finance is wrapping dollar assets into crypto tokens to meet demand​. Even banks are exploring issuing their own stablecoins or using them for settlement internally, albeit slowly.

All these trends point to stablecoins becoming deeply entrenched in both crypto and traditional finance. The market share of individual stablecoin projects is increasingly influenced by how well they can integrate with real-world use cases. For instance, USDC’s emphasis on compliance has made it the go-to for many institutions and fintech applications, whereas USDT’s first-mover liquidity and wide exchange acceptance keep it dominant in trading circles. As stablecoins are used for everything from everyday payments and remittances to DeFi lending and NFT trades, their growth has been phenomenal. In 2024, stablecoin supply grew over 50%, even outpacing the growth of the broader crypto market in some periods.​

This suggests that demand for digital dollars remains high irrespective of crypto market cycles. Looking forward, the continued growth in adoption — whether via institutional integration (like Visa), fintech offerings, or emerging market usage — is likely to further expand the total stablecoin pie. This could potentially alter market shares (for example, if a major tech company or government issues a new stablecoin, or if one of the existing ones gains a special regulatory status), but for now Tether and USDC firmly hold their duopolyat the top, with others competing in the margins of specific niches.

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