Circle’s USDC stablecoin has overtaken Tether’s USDT as the king of transactions, according to a new metric developed by Visa and Allium Labs. This unexpected shift marks a major development in the stablecoin market, potentially pointing to a growing preference for transparency and regulatory clarity.
USDC transactions are increasing
Designed to provide a more accurate picture of stablecoin usage by filtering out artificial inflation and inorganic activity, the new metric reveals a significant increase in USDC transactions. Last week alone USDC processed a staggering $456 billion in transactions compared to USDT’s $89 billion. Notably, USDC has held a dominant 50% share of total stablecoin transactions since the beginning of 2024.
This news comes as a surprise considering USDT’s long-standing dominance. Tether has traditionally held the top spot and had a much larger market share in terms of total coins in circulation (68% compared to USDC’s 20%, according to DefiLlama). While experts attribute this to USDT’s broader international presence, USDC is gaining traction primarily as a transaction currency in the United States.
Concern continues in altcoin Tether
But the tides seem to be turning. Analysts speculate that USDC’s recent success may be due to investors’ growing concern over Tether’s lack of transparency regarding its reserves. Tether has faced criticism in the past for its opaque practices, raising questions about the true value behind USDT tokens.
Circle, the issuer of USDC, has actively pursued regulatory clarity and established partnerships that encourage mainstream adoption. Their recent collaboration with Coincheck, a leading Japanese cryptocurrency exchange, exemplifies this commitment to global expansion. This strategic move opens the door for USDC to enter the lucrative Asian market, further solidifying its position as a viable alternative.
What does the USDT-USDC exchange mean?
The consequences of this change are far-reaching. It reveals clear regulatory oversight and a growing preference for utility-focused stablecoins. Investors looking for a safe-haven asset for crypto transactions may be turning to USDC due to its perceived transparency and relationship with established institutions such as Visa.
While the reasons behind the USDC surge continue to be investigated, one thing is clear: the stablecoin market is undergoing a significant transformation. Transparency, regulatory compliance, and real-world use cases are emerging as key drivers of adoption, potentially paving the way for a more mature and trustworthy cryptocurrency ecosystem.
This development presents both challenges and opportunities for Tether. The dominant stablecoin will need to adapt by addressing concerns about transparency and potentially exploring collaborations with regulators. The future of the stablecoin market depends on players being able to effectively navigate this evolving landscape by prioritizing security, trust, and real-world functionality.
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For the rest of the article, Visa Surprised: That Altcoin Will Surpass the Market Giant!