TokenPost.ai
Even as the stablecoin market has surged into a roughly $300 billion category, the competitive landscape is tightening rather than fragmenting—leaving Tether (USDT) and USD Coin (USDC) more entrenched than ever. A new report from Kaiko Research argues that the next phase of stablecoin competition will be decided less by who can mint tokens and more by who can secure durable 'adoption' and deep 'liquidity'.
In a research note published on July 6, Kaiko Research analyst Thomas Probst described stablecoins as rapidly evolving from a trading utility into core financial infrastructure used for payments, settlement, and corporate treasury operations. That shift is drawing new issuers into the space—from banks and fintechs to payment firms and crypto-native companies—yet the report finds that market growth is coinciding with greater concentration at the top.
Kaiko’s June 2026 data underlines that imbalance. USDT’s market capitalization stood at about $186 billion, while USDC totaled roughly $70 billion. Other major dollar-linked stablecoins—including Ethena’s USDe, MakerDAO’s DAI, and PayPal USD (PYUSD)—remained far smaller by comparison, reinforcing a market that is not only 'dollar-dominant' but increasingly defined by a two-asset hierarchy.
The report frames the division as structural rather than purely reputational. USDT has become a widely used dollar proxy in emerging markets, often serving cross-border transfers and day-to-day payments in regions where local banking rails are costly, slow, or inaccessible. USDC, by contrast, has leaned into regulatory positioning, institutional uptake, and integration with traditional finance, with transparency and compliance serving as key pillars of its brand. Different user bases, same advantage: both tokens are already embedded across exchanges, wallets, payment stacks, and liquidity venues.
Market share trends suggest the gap is difficult to close even when challengers grow. Kaiko estimates USDC’s share of dollar-stablecoin trading volume rose from about 11% in early 2025 to around 21% in 2026, while USDT still retained a 'clear majority'. The implication is that incremental gains by latecomers do not automatically translate into a credible threat to incumbents, because liquidity begets liquidity: high-volume assets are more likely to be listed broadly, supported by market makers, and prioritized for integration in wallets and payment platforms—creating a reinforcing loop.