The stablecoin payment landscape is undergoing a significant shift, with Tether’s USDT rapidly closing the gap on Circle’s USDC—and in some key metrics, even taking the lead. On the popular crypto payment platform BitPay, USDT has seen a dramatic rise in adoption over the past year, challenging USDC’s once-dominant position in the digital payments ecosystem.
This shift is particularly notable given USDC’s strong regulatory standing and recent milestones, including its public listing and compliance with Europe’s Markets in Crypto-Assets (MiCA) framework. Yet, despite these advantages, market dynamics and user preferences are increasingly favoring USDT, especially in real-world transaction volume.
The Changing Tide: From USDC Dominance to USDT Momentum
At the beginning of 2024, USDC held an overwhelming 85% share of stablecoin transactions on BitPay, reflecting its early lead in merchant acceptance and trust among users. However, by May 2025, that figure had dropped to 56%, while USDT surged to 43% of transaction share.
Even more telling is the data on transaction volume. Since March 2025, Tether has consistently processed over 70% of total stablecoin transaction volume on BitPay. This indicates that while USDC may still edge out in the number of individual transactions, users are moving significantly larger amounts through USDT.
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This volume dominance suggests growing confidence in USDT not just as a store of value, but as a preferred medium for everyday digital commerce—especially among high-volume users and cross-border merchants.
Why Are Users Switching to USDT?
Several factors are driving this shift:
- Global Liquidity & Market Penetration: USDT has long been the most widely adopted stablecoin across global exchanges and emerging markets. Its deep liquidity makes it easier to move in and out of quickly, a critical factor for merchants and payment processors.
- Lower Friction in Cross-Border Transactions: Many international businesses report fewer settlement delays and lower fees when using USDT compared to other stablecoins, particularly in regions with limited banking infrastructure.
- Merchant Incentives and Platform Support: BitPay and other fintech platforms have increasingly optimized their systems for USDT integration, improving user experience and reducing conversion costs.
- User Preference Despite Regulatory Uncertainty: While USDC touts its transparency and regulatory compliance—especially under MiCA—many users appear to prioritize functionality and accessibility over formal oversight.
Interestingly, Tether has taken a bold stance by opting out of MiCA compliance and shelving any near-term IPO plans. This contrasts sharply with Circle’s strategy of positioning USDC as a regulated, institutional-grade asset. Yet, user behavior suggests that for many, real-world utility outweighs regulatory branding.
Market Cap vs. Real-World Usage: A Tale of Two Metrics
From a market capitalization standpoint, USDC has grown nearly twice as fast as USDT over the past year, reflecting strong investor confidence and inflows from institutional players. However, market cap growth doesn’t always translate directly into usage.
Tether remains the largest stablecoin by total valuation, with a market cap exceeding $110 billion in mid-2025. More importantly, its increasing dominance in payment volume on platforms like BitPay highlights a critical insight: adoption in commerce is becoming a new battleground for stablecoins.
"While USDC still leads in transaction count, the rapid growth in preference for USDT among users and merchants—especially in Europe—is reshaping the landscape," said BitPay’s Chief Revenue Officer.
This divergence between ownership and usage underscores a broader trend: stablecoins are evolving beyond speculative or reserve assets into tools for daily financial activity.
Regional Trends: Europe Emerges as a Key Frontier
Europe has become a focal point in the USDT vs. USDC race. Despite MiCA giving USDC a regulatory edge, Tether is gaining traction among European merchants and consumers. This growth is fueled by:
- Rising demand for non-custodial payment options
- Increased use of decentralized finance (DeFi) integrations
- Strong adoption in e-commerce and travel sectors
In countries like Germany, Spain, and Turkey, where crypto payment adoption is growing rapidly, USDT is increasingly the go-to choice for cross-border purchases and remittances.
FAQ: Understanding the Stablecoin Shift
Q: Why is USDT gaining popularity if it’s less regulated than USDC?
A: While USDC emphasizes regulatory compliance, USDT offers broader global availability, deeper liquidity, and faster settlement—features that many users value more than formal oversight, especially in peer-to-peer and international transactions.
Q: Does USDT’s lead in volume mean it’s safer or better than USDC?
A: Not necessarily. Volume reflects usage, not safety. Both stablecoins have different risk profiles: USDC is backed by short-term U.S. Treasuries and regulated financial institutions, while Tether has diversified reserves including commercial paper and Bitcoin. Users should assess based on their needs.
Q: Can USDC regain its lead in payments?
A: Yes. With its MiCA compliance and growing partnerships with traditional financial institutions, USDC could regain ground if it improves liquidity access and reduces friction in merchant onboarding.
Q: Is this trend limited to BitPay?
A: While BitPay provides a clear case study, similar shifts are visible on other platforms like CoinGate and NOWPayments, suggesting a broader industry movement toward higher-volume, lower-friction stablecoin usage.
Q: What does this mean for the future of crypto payments?
A: It signals that stablecoins are maturing from speculative tools into real payment solutions. The winner will likely be the one that balances trust, accessibility, and efficiency across diverse global markets.
The Road Ahead: Utility Over Branding
As the crypto economy matures, the competition between USDT and USDC is no longer just about reserves or regulation—it’s about real-world utility. Tether’s ability to maintain massive liquidity while expanding into payment rails gives it a strategic edge.
Meanwhile, Circle must translate its regulatory wins into tangible merchant benefits if it hopes to maintain dominance in transaction volume. The battle is far from over, but one thing is clear: user behavior is shifting, and platforms that adapt quickly will lead the next phase of crypto adoption.
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Final Thoughts
The rise of USDT on BitPay marks a pivotal moment in the evolution of stablecoins. While USDC continues to build credibility through regulation and transparency, Tether is proving that liquidity, speed, and global reach can drive adoption just as powerfully.
For businesses and consumers alike, the choice between stablecoins will increasingly come down to practical needs rather than brand reputation. As adoption grows, expect more innovation at the intersection of payments, compliance, and decentralization—ushering in a new era of digital finance.
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