Tether's USDt and Circle's USDC, the two largest stablecoins by market cap, have lost more than 5% of their combined market share during the last year. Their share peaked at 91.6% in March 2024, but has since dropped to approximately 83.6% as new stablecoins arise.
Experts attribute this move to increased competition from yield-bearing stablecoins, new regulatory developments, and banks entering the market with their own stablecoin offers. Stablecoins like Ethena's USDe, PayPal's PYUSD, and others are gaining popularity by providing returns to holders. Circle is also collaborating with Coinbase to introduce yield choices to USDC.
Meanwhile, banking consortia such as JPMorgan and Citigroup are preparing to establish stablecoins that might compete with Tether, utilizing large distribution networks and regulatory compliance.
The expanding competition and regulatory landscape show that the long-standing duopoly of USDT and USDC is waning. Market diversification is predicted, giving investors a greater selection of transparent and yield-generating crypto assets.
