Using Circle's listing to discuss why exchanges are the key to the competition for stablecoins, and how stablecoin reserves are also the trump card for exchanges.
The leading exchange Binance and the leading stablecoin Tether both have annual revenues of billions of dollars.
➤ Why exchanges are the key to the stablecoin competition
1. The key to stablecoin issuance
Exchanges are the main venues for stablecoin trading, and their trading scale and activity directly impact the circulation of stablecoins. According to Circle's prospectus, as of March 2025, the circulation of USDC will exceed 60 billion dollars. The growth of stablecoin circulation is closely related to the promotion and support from exchanges. For example, Circle partnered with Binance, allowing USDC to participate in Launchpad mining. Circle paid Binance a one-time fee of 60.25 million dollars, which increased the USDC supply on the Binance platform from less than 1 billion dollars to 4 billion dollars, significantly boosting USDC's circulation. Coinbase has always been a major partner of Circle, with USDC reserves on Coinbase accounting for about 23% of the total circulation of USDC, which is approximately 13 billion USDC.
However, Tether (USDT) holds up to 70% market share in centralized exchanges. The strong market position of USDT is also related to Binance's initial support for USDT-related trading pairs, which are almost the main trading pairs in all exchanges, gradually growing into an irreplaceable giant with huge trading volume.
2. Determining the market share of stablecoins
The level of support for stablecoins by different exchanges directly affects the market share of stablecoins. Taking USDT and USDC as examples, there are differences in market share across different exchanges. In some mainstream exchanges, such as Binance and Coinbase, there are a variety of stablecoin trading pairs, but the main trading pairs are still dominated by USDT.
In Europe, due to regulatory restrictions, Coinbase will delist USDT by the end of the year, which will lead to a decline in USDT's market share in Europe, while the market share of regulated dollar stablecoins like USDC will increase.
3. Stablecoins are the most important asset for exchanges
Exchanges have a large user base, and stablecoins are a very important component. Binance's total reserves are 110 billion dollars, with the largest stablecoin reserve reaching 31 billion dollars, aside from BTC reserves.
At the same time, Binance has maintained zero-fee trading for stablecoins, and withdrawing stablecoins on the BSC chain is completely free, which are all very important reasons.
