Discovering that an overwhelming majority – approximately 93% – of the stablecoin market is dominated by mere two digital coins.
In the world of digital currency, Tether (USDT) and Circle's USDC have emerged as the dominant players in the U.S. dollar-backed stablecoin market. Together, they control a staggering 90% of the market, with a combined market cap of over $220 billion as of mid-2025.
Tether, launched in 2014, currently holds the largest market cap, approximately $159.1 billion. Circle's USDC, issued by Circle Internet Group, follows closely behind with a market cap of about $63.13 billion.
Other notable stablecoins include Dai and Ethena USDe, which, while significant, represent only about 5% of the market. Dai has a market cap of around $5.4 billion, while Ethena USDe's market cap falls between $4 billion and $5.33 billion.
Tether and Circle back their stablecoins primarily with a mix of U.S. dollars and cash equivalents, including large holdings of U.S. Treasury bills. Tether, in particular, holds over $100 billion in Treasuries, making it a major player in that market and ranking ahead of some countries' Treasury holdings. Circle's USDC market cap has grown rapidly by 90% over the past year, reflecting strong market demand.
Interestingly, while Tether tracks the U.S. dollar on a one-for-one basis, its reserves are not entirely backed by U.S. dollars. The rest of Tether's reserves consist of secured loans, Bitcoin, precious metals, and other investments. On the other hand, USDC's reserves are 100% composed of cash, cash equivalents, and short-term deposits.
USDC can be accessed on Ethereum's network through digital asset exchanges and was built as an ERC-20 token. Tether, in contrast, can be issued on several blockchain networks, including Ethereum, Solana, Avalanche, and EOS, making it more versatile for conducting transactions across numerous blockchains in a less volatile manner than various cryptocurrencies.
In summary, Tether and Circle dominate the U.S. dollar stablecoin market, controlling about 90% combined. As digital currency continues to evolve, it will be interesting to see how these two giants navigate the landscape and how new players might emerge.
[1] CoinMarketCap. (2025). Tether (USDT) Market Cap. [online] Available at: https://coinmarketcap.com/currencies/tether/
[2] CoinMarketCap. (2025). Circle USDC (USDC) Market Cap. [online] Available at: https://coinmarketcap.com/currencies/circle-usdc/
[3] Circle. (2025). USDC Network Data. [online] Available at: https://usdc.circle.com/data
[4] Statista. (2025). Market Capitalization of Stablecoins Worldwide. [online] Available at: https://www.statista.com/statistics/1239621/market-capitalization-of-stablecoins-worldwide/
[5] Cointelegraph. (2025). Tether Holds Over $100 Billion in U.S. Treasuries. [online] Available at: https://cointelegraph.com/news/tether-holds-over-100-billion-in-u-s-treasuries
- In the world of digital currency, Tether's massive reserve of U.S. Treasury bills, totaling over $100 billion, not only solidifies its position as the market leader but also makes it a significant player in the Treasury market.
- With USDC's reserves fully backed by cash, cash equivalents, and short-term deposits, it provides a level of transparency and stability that appeals to investors in the digital finance and investing space.
- As the demand for efficient technology-based finance options grows, new stablecoin projects may innovate in the market, potentially challenging Tether and Circle's dominant position.
