JPMorgan: USDC Overtakes USDT in On-Chain Activity

A research report from the Wall Street bank JPMorgan Chase (JPM) suggests that Circle Internet's USDC is beginning to surpass Tether's USDT in terms of on-chain activity, driven by increasing institutional and investor adoption of stablecoins that adhere to clearer regulatory standards.

The bank's analysis points out that USDC’s market capitalization surged by 72% this year to reach $74 billion, significantly outpacing USDT’s 32% growth. Although USDT remains the world's largest stablecoin, with more than double the market cap of USDC, JPMorgan attributes the shifting dynamics to regulatory clarity, particularly the European MiCA (Markets in Crypto-Assets) framework which took effect in mid-2024.

Stablecoins, which are digital currencies pegged to assets like the U.S. dollar, are vital for payment infrastructure and international remittances within the crypto market.

USDC's Advantage: Analysts, led by Nikolaos Panigirtzoglou, noted that USDT’s lack of MiCA authorization led to its delisting from several European exchanges. Conversely, USDC’s clear regulatory compliance, transparent reserves, and regular audits significantly boost its appeal among institutional users.

Accelerated Activity: USDC’s on-chain transaction velocity has climbed rapidly, largely fueled by the growing ecosystems of blockchains like Solana and Base. Furthermore, its integration with DeFi activities and partnerships with major payment giants, including Visa (V), Mastercard (MA), and Stripe, are accelerating this trend.

While USDT still dominates emerging markets and remains the primary trading pair on many exchanges, JPMorgan posits that USDC's regulatory model could potentially establish a global standard for future stablecoin development, posing a long-term challenge to Tether's market leadership.