Can USDC Catch Tether? The $100 Billion Race in Stablecoins Is Heating Up

The gap between the world’s top two stablecoins—Tether and USDC—is wide, but not impossible to close. With shifting global regulations, strategic partnerships, and growing interest from institutions, Circle’s USDC is laying the groundwork for a serious shot at overtaking Tether.

It’ll take more than ambition to knock Tether off its pedestal. But the pieces may finally be falling into place.

Tether Still Dominates, But the Game Is Shifting

Right now, Tether (USDT) sits comfortably at the top of the stablecoin food chain. It holds a commanding $158.9 billion market cap, nearly $100 billion ahead of its closest rival, USDC, which is backed by Circle Internet Group.

That number alone makes most people think Tether is untouchable. But there’s movement in the market that says otherwise.

Circle’s push has been steady. USDC now commands a $62.6 billion market cap, and it’s no longer just America’s dollar on the blockchain. About 70% of USDC’s usage is now international, according to Circle. That’s a big deal.

Tether still enjoys huge popularity across emerging markets and has 350 million users globally. But with regulators sharpening their pencils, and with Circle listing on the NYSE, things are changing.

Circle’s Global Push Is Starting to Pay Off

Circle has a big advantage in being based in New York. That opens doors that Tether simply doesn’t have access to—especially when it comes to working with U.S. banks, fintech firms, and lawmakers.

Circle’s recent IPO on the NYSE has also given it a credibility boost. Investors and regulators can now peer into its books, review its earnings, and track how it operates in real-time.

Still, USDC needs help abroad. While its U.S. roots are a strength, Tether has built deep connections in Asia, Latin America, and Africa. That won’t be easy to match.

To close the gap, USDC must:

• Build foreign partnerships across payment networks and crypto exchanges

• Launch marketing pushes tailored to emerging economies

• Maintain a consistent, regulatory-compliant image globally

USDC has the tools—it just needs to move faster.

Institutions Are Watching Closely

Big investors don’t like surprises, especially when it comes to regulation. That’s where the Genius Act changes everything.

The Genius Act, recently passed by Congress, now requires stablecoins to be backed 1:1 with cash or cash equivalents. Nothing else. No crypto, no gold, no commercial paper.

That creates a major problem for Tether. In the past, it’s been criticized for being vague—or downright evasive—about what actually backs its USDT tokens. Multiple investigations and fines haven’t helped its image either.

Circle, on the other hand, has been consistent. Transparent. Predictable. Three things institutional investors love.

So if hedge funds, insurance giants, and banks are eyeing stablecoins as safe on-ramps into crypto, they’ll likely lean toward USDC. Why bet on opacity when you can have clean books?

Tether’s liquidity is still unmatched, but with new rules in place, trust matters more.

Corporate Use Cases Could Tip the Balance

Here’s where it could get really interesting: if the big U.S. retailers jump into stablecoins, the dominoes start to fall.

According to The Wall Street Journal, both Amazon and Walmart are exploring the idea of accepting stablecoins for purchases. The upside is obvious—cutting out credit card fees could save billions.

And guess which coin is more likely to get picked?

Circle has already lined up Shopify as a payment partner. It’s also working closely with Coinbase to bring USDC into more consumer transactions. The goal? Make USDC as easy to use at checkout as a Visa card.

Retailers want fast settlement, low fees, and low risk. They don’t want regulatory headaches. USDC offers them the “clean” option.

This could be a make-or-break move in the coming years for both Circle and USDC.

What the Numbers Say: Can USDC Really Catch Up?

This is where things get a little math-y. But let’s keep it simple. Right now, the gap between USDC and Tether is around $96.3 billion.

If USDC doubles in size annually, while Tether only grows by 10% each year, here’s how the numbers could stack up:

In this scenario, USDC passes Tether by mid-2027. Of course, that assumes perfect execution by Circle and flat-ish growth for Tether. Not guaranteed.

Still, it shows the possibility is there. It’s not just wishful thinking.

If Circle can keep stacking wins with institutions and retailers, this timeline may be conservative.

Tether’s First-Mover Advantage Is Real, but Not Untouchable

Let’s not pretend Tether is going to just roll over. It has decades of crypto street cred and deep liquidity across global markets. It’s the go-to coin for many exchanges, traders, and platforms.

But it also has baggage. Regulatory shadows. Transparency issues. Questions about reserves.

USDC isn’t perfect either—its dollar peg has slipped before, and its usage still lags in Asia and Africa. But its path forward is cleaner and better aligned with where the regulatory winds are blowing.

For now, Tether wears the crown. But USDC has the map, the boots, and the will to climb.