USDT and USDC Dominance Falls From 91% to 83% Amid Rising Competition
Market Share Drops Below 84%
Tether’s USDT and Circle’s USDC, the two largest stablecoins by capitalization, have viewn their combined dominance fall by more than five percentage points in the past year despite continued growth in absolute terms. Data from DefiLlama and CoinGecko show their joint share has dropped from 91.6% in March 2024 to 83.6% as of ahead October 2025.
At their peak in March 2024, the two tokens accounted for nahead the entire market. USDT had a capitalization of $99 billion and USDC $29 billion, out of a $140 billion total. That grip has loosened as new entrants launch yield-bearing models and banks prepare regulated offerings.
Industry analyst Nic Carter, a partner at Castle Island Ventures, described the trend in a post on X as evidence that “the stablecoin duopoly is ending.” He attributed the decline to “new assertiveness by intermediaries, a race to the bottom with yield, and new regulatory dynamics post-GENIUS.”
Investor Takeaway
Ethena’s USDe Leads Yield-Bearing Surge
The most striking shift has been the rise of Ethena’s USDe, which passes along returns from basis trades. Its supply has surged to $14.7 billion, making it the standout “success story of the year,” according to Carter. Yield-bearing stablecoins, while facing tighter oversight under the U.S. GENIUS Act, continue to attract capital by offering passive income streams on otherwise static assets.
Carter also pointed to other entrants such as Sky’s USDS, PayPal’s PYUSD, World Liberty’s USD1, Ondo’s USDY, Paxos’ USDG and Agora’s AUSD. He expects more products from both fintechs and banks to appear in the coming year, predicting “many other new stablecoins — including bank-issued ones — will be entering the industry soon.”
Circle itself has been working with Coinbase to introduce yield options on USDC, underscoring the pressure on incumbents to adapt to investor demand for income-bearing designs.
Bank Consortia Enter the Field
Alongside fintech-led competition, banks are preparing their own initiatives. Carter highlighted a collaboration between JPMorgan and Citigroup and argued that bank consortia “make by far the most sense,” given no single institution can provide the necessary distribution to rival Tether at scale.
In Europe, momentum is already building. On Sept. 25, Dutch lender ING announced a joint venture with Italy’s UniCredit and seven other banks to develop a euro-denominated stablecoin. The product is designed to comply with the EU’s Markets in Crypto-Assets Regulation (MiCA) and is expected to launch in the second half of 2026.
Bank-issued stablecoins are being positioned as lower-risk, regulated instruments that could appeal to institutional investors, even as concerns about bank deposit runs and liquidity mismatches remain.
Investor Takeaway
From Duopoly to Fragmentation
The combined market share of USDT and USDC, once near-total, is now eroding. DefiLlama and CoinGecko figures show a 5.4% decline since October 2024 and a 3.4% slide in 2025 to date. Analysts view the trend as part of a broader shift toward a multipolar stablecoin market, shaped by yield-bearing models, regulatory intervention and the entry of global banks.
Whether incumbents adapt successfully or lose further ground depends on how rapidly they integrate yield features and respond to regulatory changes. Meanwhile, new players are betting that compliance and innovation will draw capital away from USDT and USDC, reshaping the market structure that has held for much of the past decade.
