Struggle for Stablecoin Dominance Enters Third Phase Amid Regulation
The stablecoin sector is entering a new phase of competition, influenced by regulatory changes from the EU and U.S. legislation. Key developments include:
- Tether leads with a market cap near $145 billion.
- Circle's USDC follows with over $60 billion in circulation; it may pursue a public listing.
- The stablecoin market could reach $2 trillion by 2028.
- Banks and payment firms are exploring ways to integrate stablecoins into their operations.
- Stablecoins have become crucial for facilitating international payments amid limited fiat on/off ramps.
- Less than 20% of Fireblocks' transaction volume involved stablecoins in 2020; this increased to 54% in 2021.
- Some banks, like Braza Bank and BTG Bank, are already supporting stablecoin transactions for business clients.
- Many banks are drafting strategic plans regarding stablecoin integration and services.
The competitive landscape has evolved through two previous stages, with Circle previously competing against Paxos and now against Tether. Regulatory compliance under MiCA gives USDC an advantage in the EU market.