USDC outpaced USDT growth in 2025 as institutional demand accelerated

Circle’s U.S. dollar pegged stablecoin USDC recorded a faster growth rate than that of Tether’s stablecoin USDT in 2025. The stablecoin’s growth is mainly attributed to the growing demand for stablecoins at the institutional level, as well as streamlined regulations in the U.S.

The stablecoin market has experienced significant expansion in both market capitalization and transaction volume. Circle’s U.S. dollar-pegged collateralized stablecoin has grown at a faster rate than Tether’s USDT in 2025. Last year’s performance marked USDC’s second consecutive year of outgrowing USDT. 

Analysts credit USDC’s performance to increased institutional demand

Analysts have credited USDC’s recent growth to the rising demand for stablecoins from an institutional level, alongside a streamlined regulatory environment surrounding the issuance of stablecoins. The U.S. government passed the GENIUS (Guiding and Establishing National Innovation for U.S. Stablecoins) Act in July 2025, paving the way for a warmer environment for stablecoin issuance and usage. 

Observers note that the GENIUS Act established a comprehensive framework for introducing stablecoins pegged to a real monetary value. The new regulations allowed several banking institutions in the jurisdiction to explore regulated stablecoins such as USDC. The crypto asset is now accessible to companies such as Visa, Mastercard, and BlackRock for treasury operations and powering transactions.

According to data from crypto data aggregator CoinGecko, Tether’s USDT still reigns as the largest stablecoin in market capitalization. The data shows that the stablecoin’s market cap is around $187.3 billion, while that of USDC is $75.8 billion as of the time of this publication.  

The two stablecoins have a combined market capitalization of over $260 billion, equivalent to more than 80% of the global stablecoin market cap. The data also shows that Tether’s USDT has outperformed Circle over the last 24 hours, with a trading volume of $91.3 billion, while Circle’s stands at $15.6 billion.

However, USDC’s market capitalization increased by 73% in 2025 to $75.12 billion, while USDT’s market cap rose by 36% to $186.6 billion. In 2024, USDC grew by 77% while USDT trailed behind with a 50% growth.

Circle Internet is the financial technology company responsible for developing and issuing USDC. The company is based in New York and is publicly listed on the New York Stock Exchange. The company backs the stablecoin with cash and short-term U.S. Treasury securities held at regulated entities. 

Circle’s compliance boosts USDC’s appeal among regulated entities

Circle is the primary beneficiary of eased stablecoin regulatory scrutiny. The company has received regulatory greenlight in several states and territories in the U.S. through money transmission licenses.

The company also complies with the European MiCA framework and conducts activities under e-money licences in major regions. On the other hand, Tether has not yet received regulatory greenlight in the U.S. or the European Union. The company operates as a licensed digital asset service provider in El Salvador.

Previous remarks by analysts at JP Morgan highlighted USDC as the go-to stablecoin for institutional investors and regulated entities due to its transparent reserve management and regular audits. The analysts also noted that the stablecoin’s compliance with Europe’s MiCA regulations makes it suitable for use by financial institutions. 

As previously reported by Cryptopolitan, Ethereum-based stablecoins experienced peak activity in 2025, with constant growth throughout the year. The report highlighted that the activity was an extension of a notable trend showing the assets’ steep growth in recent months. The number of active addresses reached a new high on several occasions last year, with more than 590,000 active wallets moving stablecoins daily. 

The year saw stablecoins behave abnormally in a way not witnessed during past market cycles, in terms of both total supply and the magnitude of usage. During the year, over $314B in stablecoins were in circulation, with much more diversified destinations, unlike previous market cycles.

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