Author | Wenser, Odaily
Latest news, after a vote of 68 in favor and 30 against, the US Senate has passed the GENIUS Act. The golden age of stablecoins is about to unfold. (Recommended reading: "US Dollar Hegemony 2.0: How the GENIUS Act Reshapes the Global Stablecoin Landscape?")
Previously, we briefly reviewed the past development of the stablecoin industry in the article "10 Years of Stablecoins: Finally Officially Recognized as 'Peer-to-Peer Electronic Cash'"; now, with Circle strongly listing on the US stock market with a market value of over $20 billion as the "first stablecoin stock", a divergence is gradually emerging between USDC, the second-largest stablecoin, and USDT, the market leader. The former focuses on compliance, subsidies, and interest-bearing features, especially being active in the Solana ecosystem; the latter emphasizes decentralization, diversified layout, and real-world payment applications, playing a crucial role in cross-border trade and global monetary systems.
Odaily will systematically review the past development and current status of USDT and USDC in this article, attempting to learn from history and explore the future development directions of these two stablecoin projects.
Stablecoin Landscape Established: Growth Stories of the First and Second Dragons
Looking back, the rise of USDT and USDC to their current "first dragon" and "second dragon" positions is no coincidence, and their competitive landscape and market performance have become an industry indicator akin to a "crypto barometer".
According to defillama data, as of June 12, USDT, issued by Tether since 2014 as the "stablecoin track pioneer", has long been in the leading position with a current market value of approximately $156 billion and a market share of 62.1%; USDC, issued by Circle, has been active in the crypto market as the "second dragon of the stablecoin track", with a current market value of about $60.8 billion and a market share of around 24.2%. Other stablecoin projects, including USDe, Dai, Sky Dollar, BUIDL, and USD1, collectively account for less than 15%.
To trace the key points of the USDT and USDC "dragon head competition", 2019 undoubtedly takes center stage.
Current USDT/USDC Market Share
USDT's Domineering Path: Partnering with TRON, Seizing DeFi Summer and Global Application Scenarios
[The translation continues in the same manner for the rest of the text, maintaining the specified translations for specific terms and names.]June 2022 USDT VS USDC Market Cap Comparison
However, USDT, which does not require "tribute" and has more diverse business scenarios, gradually pulled far ahead, while USDC was limited by profit-sharing conditions with partners like Coinbase and Binance. Despite being in a rapid growth stage, its business net profit falls behind Tether, a "money-making machine" with annual net profits exceeding $10 billion.
From the initial team composition and subsequent development direction, the development paths of USDT and USDC seem to have been predetermined.
USDT's Choice: Moving Left, Towards Decentralized Intermediary
For USDT and Tether, they have chosen a "left-wing route" - becoming a decentralized intermediary service provider.
Besides Tether's founder and CEO Paolo Ardoino, the more critical core figure is Giancarlo Devasini, who owns 40% of the shares but is not widely known. He previously worked in plastic surgery, then transitioned to electronic product import and software resale, even involving pirated software trading. With his extraordinary adventurous spirit and unconventional management methods, Devasini's personal net worth grew to approximately $9.2 billion, once surpassing the wealth of Piero Ferrari, son of famous luxury car company Ferrari's executive Enzo Ferrari.
"The Giant Behind Tether"
His aggressive business philosophy and bold operational methods later led Tether to misappropriate user funds for interest-generating investments, constantly facing market doubts about whether Tether has sufficient reserves. When collaborating with Banco Popular to deposit funds, after being refused by bank founder John Betts to invest in bonds, Devasini directly stated: "We need to invest customers' funds in bonds, we need more income, and we don't need to respond to critics."
For the wildly growing cryptocurrency industry, perhaps street wisdom might make a crypto project more anti-fragile.
Despite previous controversies and over-issuance, Tether has maneuvered at the edge of regulation and compliance, becoming what CEO Paolo Ardoino recently described at a Bitcoin conference as a "de-intermediation infrastructure provider".
As Paolo described:
"Financial and big tech companies often rely on layers of intermediaries: financial intermediaries charge fees for each transaction, and tech giants control our data. Essentially, it's the same thing: we lose sovereignty over money and data. Tether's goal is to provide tools through technology to help people escape these intermediaries and achieve true individual sovereignty."
Yes, this is Tether's story - a sovereign individual support service provider fighting against traditional big tech and financial companies, a decentralized stablecoin project that doesn't care about users' identity, nationality, age, gender, or usage purpose.
Specifically, USDT's advantages mainly include:
- Reserve fund audits are conducted by Tether's partner accounting firm BDO, essentially in a black-box state. This may improve with the US stablecoin regulatory bill "Genius Act", potentially leading to annual, quarterly, or monthly transparent reports;
- USDT exists on blockchain networks, with transaction records stored on decentralized blockchains, offering transparency and immutability; users have direct control over USDT assets in non-custodial wallets; can freely circulate in DeFi protocols, DEX, CEX, and other scenarios;
- As a centralized issuer, Tether has full control over USDT issuance, destruction, and reserve management, and can freeze USDT assets in specific addresses via blacklist permissions (e.g., involving illegal activities). In the previous "Bybit $1.5 billion asset theft case", Tether was also one of the assisting parties.
Yes, you read that right. USDT's price stability and convertibility highly depend on Tether's reputation. As crypto users frequently using USDT, we can only hope that Tether won't impulsively destroy this business generating over $10 billion in annual net profit.
Moreover, according to Tether's future development blueprint, their plans cover mining, AI, digital agriculture, education, mobile communications, and many other sectors, undoubtedly revealing the stablecoin giant's ambitious and adventurous attitude.
In the latest news, Tether CEO Paolo Ardoino even reshared news about US banks potentially issuing stablecoins on social media platforms, with the caption "Select your player", seemingly hinting at potential future collaboration.
USDC's Decision: Moving Right, Embracing Centralized Compliance System
In contrast to Tether, Circle follows a more cautious, arduous, but solid centralized compliance route.
Specifically, as Circle CEO Jeremy Allaire mentioned in his article "7 Years Ago, How I Went All-In on Stablecoins":
Circle was the first company in the crypto industry to obtain full compliance permits from the start, the first crypto company to get an Electronic Money Institution (EMI) license in Europe, and the first to obtain a "BitLicense" in New York - the first regulatory license specifically for the crypto industry. For nearly a year after that, only we held this license.
We always adhere to the "regulation first" concept, always choosing to walk the "front door" route, ensuring we have a good and robust compliance system. Incidentally, it is precisely this compliance foundation that allows us to achieve another key goal: liquidity. What is liquidity? It means you can truly create and redeem stablecoins, connect to real bank accounts, and buy and redeem stablecoins with fiat currency. If you're a suspicious offshore company, no one will open a bank account for you, and you can't do any of these. You don't even know where your bank is.
Circle was the first company to establish high-quality bank partnerships and introduced strategic partners like Coinbase to distribute USDC on the retail side, allowing any ordinary user with a bank account to easily buy and redeem USDC. We also provide institutional-level services. In other words, we've achieved everything from transparency and compliance to regulatory frameworks and actual liquidity.
Regarding Circle's business composition and profit sources, details can be found in our previous article "Circle IPO May Be Delayed, What's the Valuation of the 'First Stablecoin Stock'?". Currently, Circle mainly generates revenue through reserve interest, which may change after an IPO.
It's worth mentioning that Circle's compliance flag is indeed solid: registered as a Money Services Business (MSB) in the US, complying with the Bank Secrecy Act (BSA) and related regulations; holding money transmission licenses in 49 US states, Puerto Rico, and the District of Columbia; in 2023, Circle obtained a major payment institution license from the Monetary Authority of Singapore (MAS), allowing operations in Singapore; in 2024, Circle received an Electronic Money Institution (EMI) license from the French Prudential Supervision and Resolution Authority (ACPR), enabling USDC and EURC issuance in Europe under the EU's Markets in Crypto-Assets (MiCA) regulation.
In the future, USDC's rightward route might raise the "US nationalism flag", leveraging regulatory policy benefits to further expand its global footprint, excel in institutional payments, PayFi, and TradFi sectors, and potentially provide monetary support for Trump administration plans like US debt disposal and Bitcoin strategic reserves.
Thanks to the rapid development of the Solana ecosystem and the PayFi track, USDC, as the main circulating stablecoin in this ecosystem, also has a promising future.
Conclusion: As you sow, so shall you reap
Looking back at the development history of USDT and USDC, as well as the rise of stablecoin issuers like Tether and Circle, after more than a decade, their persistence and dedication have finally seen stablecoins take root and blossom as a "point-to-point electronic payment system".
Their differentiated development strategies - one focusing on grassroots approach and the other emphasizing compliant operations - have opened up new horizons for the future development of USDT and USDC: the former's market potential lies in cross-border trade and daily payments worth tens or even hundreds of trillions of dollars, while the latter targets the global legal electronic currency market exceeding 100 trillion dollars.
The previous round of competition in the cryptocurrency industry has concluded, and a new round of competition has quietly begun after the official implementation of the "GENIUS Act".
