Ethereum has re-emerged as the leading blockchain for the deployment of Tether’s USDT, having overtaken Tron in terms of supply. Since May, the supply of USDT on Ethereum has ballooned by approximately $17 billion, reaching a total of $77 billion. This marks a noteworthy shift considering that in May, Tron briefly claimed the title with a supply of 48% compared to Ethereum’s 42%.
Throughout the year, the two blockchain networks have remained fierce competitors, with USDT supply levels fluctuating between $75 billion and $80 billion. As of the latest data from DeFiLlama, Tron’s supply stands at $76.23 billion.
One of the driving factors behind Ethereum’s regained dominance is the growing institutional adoption of its network. While retail traders have shown a preference for Tron due to its lower fees, Ethereum’s robust infrastructure and deep liquidity have made it a favorite for institutional players. Such institutions are lured by Ethereum’s extensive ecosystem in decentralized finance (DeFi). Alongside Ethereum and Tron, other notable blockchains are also involved: BSC (Binance Smart Chain) holds 7.48% of the total USDT supply, while Plasma (XPL) accommodates a supply of $4.37 billion. Solana appears to lag significantly, capturing only $2.1 billion of the USDT supply.
Currently, Ethereum’s daily USDT transactions hover around 400,000, with overall network transactions exceeding 1.64 million—a clear indication of its widespread use in payments and settlements across the DeFi landscape. Nonetheless, Tron maintains the edge in terms of daily transaction volume.
The institutional embrace of Ethereum is highlighted by recent movements, such as PayPal integrating its PYUSD stablecoin within the Ethereum network, which has amassed a supply of $1.75 billion. The dynamic volume of USDT on Ethereum plays a crucial role in cross-chain bridge activities, liquidity provisioning, and exchange partnerships. As traditional financial systems increasingly adopt blockchain-based payments, Ethereum is increasingly positioned as the preferred settlement layer for institutional applications.
In the broader landscape of stablecoins, Tether leads with a hefty market cap of $174 billion, while Circle’s USDC follows with a market cap of $74 billion. Together, these two tokens dominate the stablecoin sector, albeit with differing strategies. Tether, launched in 2014 as RealCoin and later rebranded, quickly became a favored tool for cryptocurrency transactions due to its speed and cost-effectiveness. However, it has not been without controversy, facing regulatory scrutiny and concerns regarding its reserve practices. The token is now available on over 90 different networks.
On the other hand, Circle’s USDC, which debuted in 2018, emphasizes compliance and transparency. The company routinely publishes monthly attestations, closely collaborates with American financial institutions, and made its public debut on the New York Stock Exchange (NYSE) in June, raising over $1 billion during its IPO. Circle positions itself as a regulated alternative to Tether.
The recent growth in stablecoin competition has been bolstered by the U.S. regulatory landscape. The GENIUS Act, signed into law in July, established comprehensive standards for stablecoin firms, mandating monthly public reserve disclosures, third-party attestations, and stringent asset composition limits. Circle’s operational framework has allowed it to remain largely compliant with these new requirements, while Tether aims to launch a U.S.-compliant token, USAT, alongside its global USDT offerings.
Despite the competitive pressures, Tether has exhibited strong financial performance, generating billions in quarterly profits predominantly from its holdings in U.S. Treasuries. Notably, Tether has emerged as a significant holder of U.S. government debt, investing over $24 billion in short-term Treasury bills since July. In contrast, Circle’s USDC has been facing challenges primarily due to its revenue-sharing model with partners, even as it continues to cultivate institutional trust through transparency and compliance.
