Tether Plans USAT Stablecoin, Circle Faces Market Share Threat

Circle, the issuer of the stablecoin USDC, is facing intense competition from several players in the market. Tether, the issuer of USDT, is planning to launch a new stablecoin, USAT, which fully complies with the recently enacted GENIUS Act in the United States. Tether's current flagship stablecoin, USDT, has only about 80% of its reserve assets compliant with the Act. Tether intends to have the reserve assets of USAT managed by Anchorage Digital, which holds a banking license.

Hyperliquid is also preparing to launch its native stablecoin, USDH, to reduce its dependence on Circle's USDC. Analysts note that Hyperliquid's futures exchange currently accounts for approximately 7.5% of the total usage of USDC, indicating that the launch of USDH could lead to a contraction in USDC's market share.

Other participants are also entering the market. Financial technology companies Robinhood and Revolut are reportedly developing their own stablecoins. Circle, on the other hand, is building a dedicated stablecoin blockchain called Arc, which aims to optimize speed, security, and interoperability to ensure USDC's core position in the cryptocurrency ecosystem.

Analysts warn that unless the cryptocurrency market experiences significant expansion, the current market landscape for U.S. stablecoin issuers may ultimately lean towards a "zero-sum game." This is because the supply of stablecoins is closely related to the overall market value of cryptocurrencies. If the entire cryptocurrency market does not expand significantly, issuers may be competing for market share rather than collectively expanding the market size.

Currently, the stablecoin market has grown to approximately 278 billion dollars, but its proportion of the total cryptocurrency market value has remained stable and has been below the 8% average since 2020. This suggests that the market is not growing in tandem with the overall cryptocurrency market, and issuers are likely competing for a fixed pie rather than expanding it.