Circle Internet’s dollar-pegged stablecoin (CRCL), USDC, rose faster than larger rival Tether’s USDT for the second year in a row in 2025, fueled by growing demand for regulated blockchain-based dollars as the U.S. government warmed to digital assets.
USDC’s market cap increased 73% to $75.12 billion, while USDT’s market cap increased 36% to $186.6 billion, according to CoinDesk data. In 2024, USDC is up 77%, compared to 50% for USDT.
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. USDC is backed by cash and short-term US Treasury bonds held at regulated institutions.
In the United States, Circle holds money transfer licenses in various states and territories, as well as a virtual currency license in New York State. In Europe, it complies with the post-2024 MiCA framework and operates under e-money licenses in key jurisdictions.
Tether’s USDT remains unregulated in the United States and Europe. The company, founded in 2014 and led by CEO Paolo Ardoino, operates as a licensed digital asset service provider in El Salvador. Tether did not respond to an emailed request for comment.
Trust factor
USDC’s outperformance appears to be rooted in institutional demand for assets that comply with regulatory guidelines, observers noted.
The GENUIS Act created a comprehensive framework for payment stablecoins and digital tokens linked to monetary value and intended for payments. This has prompted several prominent banks and investment institutions to explore stablecoins, especially regulated ones like USDC.
The token, for example, has been actively integrated and favored by companies such as Visa, Mastercard and BlackRock, primarily for settlement and treasury operations.
“USDC’s transparent reserve management and regular audits make it more trustworthy among institutional investors and other regulated entities,” JPMorgan analysts. said in a note in October.
“Additionally, its compliance with frameworks such as the Markets in Crypto-Asset (MiCA) Regulation in Europe sets it apart from its competitors, making USDC the preferred stablecoin for financial institutions,” they added.
USDC and USDT together account for more than 80% of the total value of the $312 billion stablecoin market, a sign that other tokens have yet to benefit from regulatory developments in the world’s largest economy.
“Treasury Secretary Scott Bessent has repeatedly stated that the stablecoin market could reach $3.7 billion by the end of the decade. Against this backdrop, it remains to be seen whether stablecoin growth will remain limited to USD and USDC, or whether it will significantly expand to other tokens,” the FRNT Financial analyst said in a Friday newsletter.
“Nevertheless, crypto proponents are optimistic that the proliferation of stablecoins will attract new capital and users to the crypto ecosystem in 2026,” they added.
