Despite the growing competition from emerging issuers, the stablecoin market continues to be largely dominated by a few key players. According to data from Web3 research firm Nansen, Tether's USDT continues to lead among US dollar-pegged stablecoins, even with intensified competition.
As of April 25, Tether (USDT) has a market share of approximately 66% among stablecoins, compared to about 28% for USDC (USDC), Nansen said in the April 25 report. Ethena's USDe stablecoin holds a distant third place, with a market share of just over 2%.
Nansen expects Tether's leadership to persist even as rivals like USDC present faster growth rates.
"With nearly 3 times more users than Uniswap and over 50% more transactions than the next app, Tether is by far the largest use case of on-chain activity," said Nansen.
"Despite the potential dispersion in stablecoins, we inevitably believe this is a market dynamic of 'winner takes most'," added the Web3 researcher.
Tether is also the most profitable stablecoin issuer, recording nearly $14 billion in profits in 2024. The company earns revenue by accepting US dollars to issue USDT and then investing those dollars in highly liquid, yield-generating instruments, such as US Treasury securities.
"Given the growth of USDT and USDC, users are clearly expressing that they do not necessarily care about yield, as they are foregoing it for Tether and Circle - they simply want access to the most liquid and 'stable'/least prone to de-pegging stablecoin available," said Nansen.
Competitive landscape
The adoption of USDC accelerated since November, when the electoral victory of US President Donald Trump brought a more favorable regulatory environment for crypto, Nansen said.
Circle's regulated US stablecoin has been "particularly attractive to institutions that require regulatory clarity," the report said.
But USDC now faces "intensified competition as large traditional financial institutions (i.e., Fidelity, PayPal, and banks) enter the market," said Nansen, adding that stablecoins, including PayPal's PYUSD and Ripple USD, are "rapidly gaining traction."
On April 25, payment processor Stripe announced plans to create a new stablecoin product after acquiring the Bridge stablecoin platform last year.
Despite its smaller market share, Ethena's USDe stablecoin remains "competitive in many aspects going forward," partly due to integrations in centralized exchanges (CEXs) and decentralized finance (DeFi) protocols, according to the report.