Author | Wenser, Odaily
Original Title: The Golden Age of Stablecoins Begins: USDT Goes Left, USDC Goes Right
Latest news, after a vote of 68 in favor and 30 against, the U.S. Senate has passed the GENIUS Act. The golden age of stablecoins is about to unfold. (Recommended reading: "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 U.S. stock market with a market value of over $20 billion as the "first stablecoin stock", a divide 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 currency.
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 direction of these two stablecoin projects.
Stablecoin Landscape Initially Defined: The 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 the competitive landscape and market performance between the two 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 "top 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 the lead.
Current Market Share of USDT/USDC
USDT's Domineering Path: Partnering with TRON, Seizing DeFi Summer and Global Application Scenarios
... (rest of the text continues in the same manner)At that time, USDT's market value dropped to around $66.9 billion; USDC, backed by Coinbase and adhering to compliance and full reserve principles, ushered in a wave of growth, with its market value increasing to around $55 billion, with a difference of less than $12 billion between the two.
Comparison of USDT vs USDC Market Value in June 2022
Subsequently, 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 phase, its business net profit fell far 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 chose a "left-wing route" - a decentralized intermediary service provider.
Beyond Tether's founder and CEO Paolo Ardoino, the more critical core figure is Giancarlo Devasini, who owns 40% of the shares but is less known to the outside world. He previously worked in plastic surgery before transitioning to electronic product imports and software resale, even involving pirated software trading. With his extraordinary adventurous spirit and unconventional management methods, Devasini's personal net worth grew to around $9.2 billion, once surpassing the wealth of Piero Ferrari, son of the famous Ferrari executive Enzo Ferrari.
"The Giant Behind Tether"
His aggressive business philosophy and bold operational methods led to Tether misappropriating user funds for interest-generating investments, constantly facing market doubts about its reserve sufficiency. When collaborating with Banco Popular to deposit funds, after being refused by the bank's 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 can make a crypto project more antifragile.
Despite previous controversies and over-issuance, Tether has managed to navigate between 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 break free from these intermediaries and achieve true individual sovereignty."
Yes, this is the story Tether tells - 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, the advantages of USDT issued by Tether are mainly reflected in:
Reserve fund audits are conducted by Tether's partner accounting firm BDO, essentially in a black box state. This situation is expected to improve after the U.S. stablecoin regulation bill "Genius Act", when Tether may publish annual, quarterly, or even monthly transparent reports;
USDT exists on blockchain networks, with transaction records stored on decentralized blockchains, featuring transparency and immutability; users have direct control over USDT assets in non-custodial wallets; it can circulate freely in DeFi protocols, DEXs, CEXs, 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 through blacklist permissions (such as in 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 suddenly ruin this business with annual net profits exceeding $10 billion.
Moreover, according to Tether's subsequent development blueprint, its 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 reposted news about U.S. banks about to issue stablecoins on social media platforms, with the caption "Select your player", seemingly hinting at potential future cooperation.
USDC's Decision: Moving Right, Embracing a 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 a full compliance license from the start, the first crypto company to obtain an Electronic Money Institution (EMI) license in Europe, and the first company 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 have always adhered to the "regulation first" philosophy, always choosing to walk the "front door" route, ensuring we have a good and robust compliance system. Incidentally, it is precisely because of this compliance foundation that we could 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, from transparency, compliance, and regulatory framework to actual liquidity, we've done it all.
Regarding Circle's business composition and profit sources, you can refer to our previously published article "Circle IPO May Be Delayed, What's the Valuation of the 'First Stablecoin Stock'?". Currently, Circle still primarily generates revenue from reserve interest, a situation that may change after its IPO.
It's worth mentioning that Circle's compliance flag is indeed solid: it is registered as a Money Services Business (MSB) in the United States and complies with regulations such as the Bank Secrecy Act (BSA); it has money transmission licenses in 49 U.S. states, Puerto Rico, and the District of Columbia; in 2023, Circle obtained a principal payment institution license from the Monetary Authority of Singapore (MAS), allowing it to operate in Singapore; in 2024, Circle received an Electronic Money Institution (EMI) license from the French Prudential Supervision and Resolution Authority (ACPR), enabling it to issue USDC and EURC in Europe under the EU's Crypto Assets Market Regulation (MiCA) framework.
In the future, USDC's path may raise the "American nationalism flag", leveraging favorable regulatory policies to further expand its global footprint, and shine in institutional payments, PayFi, and TradFi sectors, while also providing certain monetary support or assistance for the Trump administration's plans to digest US debt and Bitcoin strategic reserves.
Benefiting from the rapid development of the Solana ecosystem and the PayFi track, USDC, as the main circulating stablecoin in this ecosystem, is also worth looking forward to.
Conclusion: You reap what you sow
Looking back at the development history of USDT and USDC, and the rise of stablecoin issuers like Tether and Circle, after more than a decade, the past persistence and adherence have finally waited for the day when stablecoins take root and blossom as a "point-to-point electronic payment system".
A firm mass line and a differentiated development strategy focusing on compliance have opened up new perspectives for the subsequent development of USDT and USDC: the former's market is cross-border trade and living payments worth tens or hundreds of trillions of dollars, while the latter's market is the global legal electronic currency with a total scale of over 100 trillion dollars.
The previous round of competition in the cryptocurrency industry has come to an end, and the new round of competition has quietly begun after the official landing of the "GENIUS Act".
