Analysts at Mizuho say a shift in stablecoin usage is underway, with a Circle-issued dollar-pegged token appearing to surpass its main rival in on-chain transaction volume for the first time since 2019. In a Friday research note, the bank highlighted year-to-date adjusted volumes of about $2.2 trillion for the Circle-backed stablecoin against roughly $1.3 trillion for the Tether-backed option, signaling a move toward routine payments rather than just crypto trading. The report also notes that the Circle-backed coin claims about 64% of the combined turnover between the two, reversing a long-running pattern in which the Tether-backed token led on volume. Circle’s public listing on the NYSE in June 2025 drew attention, though the initial price reaction was muted. By market cap terms, the Tether-backed stablecoin remains dominant, with approximately $184 billion in circulation compared to about $79 billion for its Circle-backed rival.

Key takeaways

• The Circle-backed stablecoin surpassed the Tether-backed counterpart in on-chain transaction volume for the year to date, underscoring a shift toward stablecoins used for everyday payments rather than speculative activity.
• Adjusted volumes show Circle’s token at about $2.2 trillion versus roughly $1.3 trillion for Tether’s stablecoin, translating into a 64% market share for Circle’s offering within the two assets’ daily activity.
• Despite the volume leadership, Tether’s stablecoin remains larger in terms of market capitalization, with around $184 billion in circulating supply versus about $79 billion for Circle’s stablecoin.
• Circle’s stock began trading on the NYSE in June 2025, and the initial move after the IPO was modest, indicating a separation between on-chain usage dynamics and traditional equity performance.
• Policy and regulatory hurdles in the United States continue to shape stablecoin discussions, with lawmakers weighing a digital asset market framework even as debates over stablecoin yield and tokenized equities persist.

Tickers mentioned: $USDC, $USDT

Sentiment: Neutral

Price impact: Neutral. The report highlights a shift in usage patterns rather than immediate price movements, with market capitalization remaining skewed toward the Tether-backed stablecoin.

Market context: The findings come as the broader crypto market contends with liquidity dynamics and ongoing regulatory discussions in Washington over stablecoins and market structure, illustrating how on-chain activity and regulatory policy can diverge in the near term.

Why it matters

The potential migration of everyday transactions toward a Circle-backed stablecoin could recalibrate how participants fund wallets, settle micro-payments, and bridge assets across networks. If a stablecoin gains traction as the preferred medium for routine exchanges, its on-chain liquidity profile, settlement efficiency, and interoperability across exchanges and wallets could influence funding costs and user experience. Yet the distinction between on-chain transaction volume and market capitalization remains pronounced: even with higher volumes, USDT continues to dominate in overall supply and market depth, which matters for liquidity when markets swing or during large withdrawals.

For builders and exchanges, the volume shift flags a possible reallocation of demand toward a different stability mechanism or settlement rails. Protocols that rely on stablecoin liquidity for cross-chain liquidity provision, automated market makers, and DeFi lending could feel the impact of changing user preferences. Regulators, meantime, watch and weigh how stablecoins interact with yield, compliance, and consumer protection norms as they craft potential standards for a broader digital asset framework.

The data also highlights how headline market capitalizations may diverge from real-world usage metrics. A stablecoin can be widely used for payments and remittances even if its nominal market cap remains smaller than that of a rival. In this case, the Circle-backed token’s stronger daily turnover suggests broader acceptance in payments corridors, merchant integrations, and cross-border settlements, while Tether’s larger capitalization preserves its role as a liquidity backbone. The coming quarters will reveal whether the usage trend persists or whether market forces re-balance these two pillars of the stablecoin ecosystem.

As part of the broader narrative, policymakers continue to weigh a structured framework for digital assets, including debates over stablecoin yield and tokenized equities. The CLARITY Act, which previously moved through parts of Congress, has faced hurdles in the Senate, where leaders indicate a priority on voting requirements rather than immediate market-structure reforms. These political dynamics create a backdrop in which on-chain metrics may diverge from regulatory momentum, making immediate price or allocation signals less predictable than the underlying activity data might suggest.

For readers tracking the big-picture trajectory, the divergence between on-chain activity and market capitalization can be telling. The shift toward a more transaction-focused usage pattern does not necessarily translate into an immediate re-rating of the asset’s value, but it does imply a growing role for a Circle-backed stablecoin in daily payments and merchant settlement. Investors and users should monitor whether this usage trend endures as merchant adoption, cross-border flows, and DeFi integrations evolve in parallel with regulatory developments.

To contextualize these movements, a separate data point underpins the narrative: Circle’s public listing on the NYSE in June 2025. While the IPO event catalyzed attention around the governance and corporate side of the ecosystem, the market reaction to the volume shift remains a separate thread, underscoring how on-chain dynamics can outpace traditional equity performance in this rapidly evolving space. The ongoing conversation around stablecoins—how they yield, how they are regulated, and how tokenized instruments may coexist—will continue to shape liquidity, risk appetites, and product design across the crypto ecosystem.

For a direct look at the discussion around USDC, USDT, and their evolving roles, readers can explore the linked materials, including deep-dive notes and index references that track price and circulation metrics over time. A video discussion related to the topic is available here: Video discussion on stablecoin dynamics.

What to watch next

• Upcoming quarterly volume disclosures for USDC and USDT to confirm whether the 64% share persists into the next data cycle.
• Progress on the CLARITY Act or alternative US digital asset market framework bills in Congress and any votes scheduled in the Senate.
• Shifts in market capitalization versus on-chain usage, including any notable changes in the size of each stablecoin’s circulating supply.
• Broader regulatory guidance on stablecoin yield, ethics, and tokenized equities and how those will impact issuer strategies.

Sources & verification

• Mizuho research note comparing transaction volumes between Circle-backed USDC and Tether-backed USDT, including the 64% market-share figure and the $2.2 trillion vs $1.3 trillion volume comparison.
• Circle stock listing on the NYSE in June 2025 and subsequent price action.
• Price index references for USDC (CRYPTO: USDC) and USDT (CRYPTO: USDT) as cited in price-tracking discussions.
• US Senate discussions around the CLARITY Act and related market-structure debates affecting stablecoins, including notes about voting-priority scheduling in the Senate.

Stablecoin usage shifts and the on-chain volume race

The latest data from a major investment bank captures a pivotal moment in stablecoin dynamics. The Circle-issued stablecoin (CRYPTO: USDC) appears to have overtaken its Tether counterpart (CRYPTO: USDT) in on-chain transaction volume for the year to date, marking a departure from a multi-year pattern in which USDT led most volume metrics. The bank’s analysis shows USDC posting about $2.2 trillion in adjusted year-to-date volume, while USDT sits around $1.3 trillion. With these figures, USDC has captured roughly 64% of the combined turnover between the two entities, signaling a shift toward stablecoins as day-to-day payment rails rather than merely a liquidity layer for whales and traders.

The juxtaposition of high transaction activity with market capitalization also tells an important story. While USDC is catching up in usage, USDT retains a commanding head start in global supply, boasting a market capitalization near $184 billion compared with USDC’s roughly $79 billion. This divergence underscores a broader theme in crypto markets: usage and liquidity can outpace capitalization when user adoption and merchant integration expand. The leadership in on-chain volume does not automatically translate into price or market-share dominance, but it does illuminate where real-world activity is concentrated and where demand for stable value storage is coalescing.

The discussion around stablecoins in the policy arena adds another layer of complexity. Lawmakers continue to debate a digital asset market structure that could govern stablecoins, yield-bearing tokens, and tokenized equities. While the CLARITY Act has flowed through various chambers, its path in the Senate remains uncertain, and recent statements from Senate leadership suggested a focus on voting requirements rather than a comprehensive market-structure bill in the near term. In this environment, traders and users may react to on-chain data and market sentiment independently of how quickly lawmakers move on the regulatory front.

From a market perspective, the contrast between volume leadership and market capitalization is not merely a curiosity; it shapes how ecosystem participants allocate capital and design services. Exchanges and wallets perspective that favor stablecoin liquidity for payments could prioritize integration with USDC’s rails if the usage trend endures, while liquidity providers still rely on USDT for broad market depth. The net effect for users could be a more diverse stablecoin landscape where multiple tokens compete on reliability, ease of use, and the breadth of acceptance by merchants and platforms.

In sum, Mizuho’s data points to a period of evolving usage patterns among the stablecoins that anchor much of the crypto economy. The fact that a Circle-backed token is capturing a larger share of on-chain volume signals a potential shift in user preference for stability in routine transactions. As policymakers weigh structural reforms and market participants adjust to new usage realities, the next several quarters will reveal whether this shift solidifies or whether the market rebalances toward a broader mix of stablecoins for settlement and payments. For readers following the crosscurrents of price, volume, and policy, the evolving picture remains a critical lens on how the crypto economy is mutating beyond headline market caps.