Tether’s USDT Could Cede Market Share as USDC Slips and Yield-Bearing Rivals Challenge Stablecoin Duopoly

Stablecoin duopoly refers to USDT and USDC dominating the market; that dominance is slipping as yield-bearing challengers and bank-backed consortia gain share, dropping the USDT+USDC combined market share from 91.6% in early 2024 to about 83.6% ￰0￱ and USDC combined market share has fallen from 91.6% to ~83.6%. Emerging yield-bearing stablecoins like Ethena’s USDe have grown rapidly, changing competitive ￰1￱ consortia and regulatory shifts (e. g., MiCA, GENIUS discussions) increase issuance options and distribution ￰2￱ keyword: stablecoin duopoly — Learn why USDT and USDC market share is declining and what new issuers mean for stablecoin ￰3￱ ￰4￱ dominating stablecoin inflows, Tether’s USDt and Circle’s USDC have slowly lost market share, signaling the end of the “stablecoin duopoly.” Despite Tether’s USDt (USDT) and Circle’s USDC (USDC) steadily increasing nominal market capitalizations, their combined dominance of the stablecoin market has declined meaningfully since early ￰5￱ tracked by industry aggregators such as DefiLlama and CoinGecko show a notable shift in market share ￰6￱ is the stablecoin duopoly and is it ending?

The stablecoin duopoly describes USDT and USDC controlling the majority of circulating ￰7￱ combined share peaked at 91.6% in March 2024 and has since declined to roughly 83.6%, driven by yield-bearing entrants and new bank-issued ￰8￱ have USDT and USDC market shares changed since 2024? USDT and USDC reached a combined market capitalization share of 91.6% when the market was near $140 ￰9￱ that peak, USDT was ~ $99 billion and USDC ~ $29 ￰10￱ Oct. 2, 2024, the pair has lost more than 5% of combined share, now roughly 83.6%. Market capitalization of USDT and USDC versus total stablecoin market cap. Sources: DefiLlama, CoinGecko Why are challengers gaining traction?

New issuers are offering yield-bearing mechanics, attractive passive returns, and varied collateral ￰11￱ Carter, partner at Castle Island Ventures, notes that intermediaries and startups are becoming more assertive, creating a “race to the bottom with yield” or a competitive yield frontier that undercuts legacy issuers. Ethena’s USDe is singled out as the largest recent success, expanding supply to an estimated $14.7 billion by offering yield derived from basis trading ￰12￱ notable entrants include Sky’s USDS, PayPal’s PYUSD, World Liberty’s USD1, Ondo’s USDY, Paxos’ USDG, and Agora’s AUSD (all referenced as plain text sources). How will bank-issued stablecoins affect the market?

Regulatory changes and bank collaboration are reshaping ￰13￱ argues that consortia of banks are the most plausible challengers because no single bank has the distribution to match ￰14￱ European efforts, including a joint venture involving ING and UniCredit under MiCA compliance, aim to issue a euro-denominated stablecoin in H2 ￰15￱ top yield-bearing stablecoins by market cap.