Stablecoin market cap surpasses $300B as USDT, USDC lead growth

The stablecoin market has surpassed $300 billion in capitalization for the first time, according to DeFiLlama data. Tether (USDT) is in the lead with a $176.25 billion market capitalization, making up 58.44% of the market, followed by Circle’s USDC with over $74 billion. Falling in third place is Ethena’s yield-bearing USDe with a $14.83 billion implementation.

Despite strong growth, USDT and USDC have lost over 5% of market share combined since October 2024. Their dominance has dipped from 91.6% in March 2024 to 83.6% today, and this is due to changes in the stablecoins market.

Decline of the stablecoin duopoly

Industry analyst Nic Carter called the drop “the end of the stablecoin duopoly.” He highlighted competition from yield-bearing stablecoins and new avenues of regulatory access that enable banks to come into the market.

Carter said that as yields become an important competitive factor, even issuers outside of the top two stablecoins can attract liquidity by offering better returns. He also pointed out that the GENIUS Act in the United States has opened the door for financial institutions to issue their own stablecoins.

According to Carter, no one bank could compete in isolation with Tether, but bank consortia are a credible way forward. He predicted that group-backed stablecoins will possibly become the most viable entrant in the coming years.

Major banks have already started preparing to enter. JPMorgan and Citigroup recently announced a joint venture for a stablecoin. In Europe, Dutch lender ING joined UniCredit and seven other banks to work on a stablecoin in euros, compliant with MiCA regulations. The consortium expects to launch in 2026.

Such developments indicate a general trend where banks are not mere observers but active players in the stablecoin space. While bank deposit runs are an issue, Carter and other analysts believe institutions will come to embrace issuance for strategic purposes.

Citigroup projects $4 trillion market by 2030

Citigroup has revised its stablecoin forecast, estimating a market of $4 trillion by 2030, as reported by Cryptopolitan. Its revised forecast elevates the “base case” estimate to $1.9 trillion and the “bull case” to $4 trillion, both from previous estimates.

Citigroup analysts say stablecoins will not erode the banking industry but will integrate into it. They envision that stablecoins will work alongside tokenized deposits to reinvent payments and capital markets infrastructure. The report is in stark contrast to the alarms some regulators have sounded, arguing that integration, not disruption, will characterize the future of banking and stablecoins.

Stablecoins have also received political support in the United States. Treasury Secretary Scott Bessent has stated that they contribute to the dollar’s global role by improving access to the dollar. The administration of President Donald Trump has sought to maintain U.S. dominance over digital assets by adopting stablecoins as part of its approach.

Following the GENIUS Act, countries outside the U.S. are also looking at issuing stablecoins. Governments view them as a means to extend the international circulation of their national currencies in foreign exchange markets.