Tether’s USDT and Circle’s USDC are the two largest stub coins of market capitalization, gradually losing market share over the past year, suggesting a major change in the Stablecoin landscape.
Despite the USDT (USDT) of Tether and USDC of Circle (USDC) steadily increasing market capitalization, Defillama and Coingecko data shows that since October 2, 2024, StabreCoin has lost more than 5% of its total market share.
Industry analyst and Castle Island Ventures partner Nic Carter won X on Wednesday, addressing the decline in USDT and USDC domination with a post entitled “The Stablecoin Duopoly Is Ending.”
According to Carter, new issuers can undercut the leading issuers of Stablecoins, which support the yield, but banks have the opportunity to bring large industry rivals.
USDT and USDC sharing peaked at 91.6% in 2024
Carter said the USDT and USDC dominance reached historic highs in March 2024.
At the time, USDT had a market capitalization of approximately $99 billion, while USDC had a market capitalization of $29 billion, accounting for 91.6% of Stablecoin’s market capitalization.
“But it’s falling to 86% since it peaked last year. I believe it will continue to decline,” the analyst said:
“The reasons are the dynamics of new claims by intermediaries, competition to a bottom with yields, and new regulations after Genius.”
According to Defillama and Coingecko, the total market share of USDT and USDC has dropped to an additional 83.6% at the time of writing, down 5.4% since October 2, 2024 and down 3.4% since the beginning of the year.
Ecena’s USDE is “the biggest success story.”
Carter has tackled a growing competition of stability and highlighted several important stub coins, including Sky’s USDS (USDS), Ethena’s USDE (USD), PayPal’s PYUSD (PYUSD), and World Liberty’s USD1 (USD1).
“I think it’s worth paying attention to emerging names like Ondo’s USDY, Paxos’ USDG, and Agora’s AUSD,” Carter adds, predicting that many other new stubcoins will soon enter the industry, including those issued by the banks.
Carter said many of these stubcoins are focused on providing yield or passive income to hold the stubcoins.
“Ethena’s USDE, passing yields from Crypto Basing Trade, is the biggest success story of the year, surges to a $14.7 billion supply,” he said.
According to Carter, this trend is expected to continue to rise despite regulatory pressure on the surrender stability stubcoin introduced by the US genius law.
Related: USDT and USDC dominate $46 billion in quarterly stability inflows
“New startups can undercut major publishers with yields and create races to the bottom (or realistically the top) phenomenon,” he said.
A consortium comparable to the tether to the bank’s stub coin consortium
In addition to yields, Carter highlighted changes in regulatory authorities that would allow banks and financial institutions to issue stable ones.
Despite existing concerns about the implementation of bank deposits, banks will inevitably join the industry “for some reason,” he said.
Carter also focuses on related developments, including the stubcoin collaboration between JPMorgan and Citigroup, predicting that the banking consortium will be “most meaningful.” That’s because, according to Carter, “there is no individual ability to create the distributions required for stubcoins that can compete with tether.”
Related: Bank of England Governor says Stubcoin can reduce reliance on banks
Recently, several major European banks have joined the emerging trend. On September 25, the Dutch lender announced a joint venture between Italian Unik Reddit and seven more banks, building a potential stubcoin for the euro religion.
Built in compliance with the European market in the Crypto-Assets Regulation (MICA) framework, Stablecoin is scheduled to be published in the second half of 2026.
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