Rising Stablecoin Momentum Suggests a Turning Point as USDC Surpasses Tether in Real Transaction Activity

A notable shift is emerging in the stablecoin landscape, one that could reshape how digital dollars circulate across the cryptocurrency economy. For the first time in years, USD Coin has surpassed Tether in transaction activity, marking a potential turning point in the long-standing rivalry between the two largest stablecoins.

According to research released by the Japanese investment bank Mizuho, Circle’s USDC has generated roughly $2.2 trillion in adjusted transaction volume since the beginning of the year. Over the same period, Tether’s USDT recorded about $1.3 trillion. The change means USDC now accounts for approximately 64 percent of the combined adjusted transaction flow between the two assets.

The development reverses a trend that had dominated the market since 2019, when Tether cemented its position as the most widely used stablecoin across trading platforms and blockchain networks. For years, USDT served as the default liquidity bridge in crypto markets, powering trading pairs, cross-border transfers and decentralized finance activity.

Transaction activity, however, tells a deeper story than simple market size. Analysts at Mizuho emphasize that while market capitalization reflects how much capital is stored in a stablecoin, transaction volume reveals how actively that asset is being used in the real economy of digital finance. In other words, it measures circulation rather than accumulation.

From that perspective, the new data suggests that USDC may be gaining traction as a settlement layer for transactions across exchanges, payment systems and institutional trading desks. If the trend continues, it could indicate that market participants are gradually shifting toward a stablecoin perceived as more aligned with traditional regulatory and financial standards.

Despite the shift in activity, Tether still maintains a commanding lead in terms of market capitalization. The company’s flagship token holds an estimated market value of around $184 billion, compared with roughly $79 billion for USDC. That gap highlights the difference between stored liquidity and active usage, two metrics that can diverge significantly in rapidly evolving financial ecosystems.

Regulation is also shaping the competitive dynamics between stablecoin issuers. In the United States, policymakers remain divided on how digital dollar assets should be supervised. The CLARITY Act, a legislative effort designed to establish a clearer regulatory framework for digital assets and stablecoins, has passed the House of Representatives but remains stalled in the Senate.

Disagreements over issues such as stablecoin yield mechanisms, ethics requirements and the classification of tokenized securities have slowed progress. Senate leadership has also signaled that other legislative priorities may take precedence, leaving the future regulatory landscape uncertain for now.

That uncertainty could influence how institutions choose between stablecoins. Circle operates as a U.S.-based company subject to domestic regulatory oversight, while Tether is headquartered in the British Virgin Islands, a distinction that often enters discussions about transparency, compliance and long-term regulatory compatibility.

Another key aspect of the new data lies in the methodology used to measure activity. The research focuses on adjusted transaction volume, a metric that filters out automated transfers and internal movements between wallets controlled by the same entities. By removing those distortions, analysts attempt to capture a clearer view of genuine economic demand.

Whether USDC’s lead represents a temporary surge or the beginning of a structural shift remains uncertain. Yet the numbers offer a glimpse of a changing market in which the stablecoin that moves the most money, rather than simply holding the most, may shape the next phase of digital finance.