In 2025, a notable shift has taken place in the world of cryptocurrency payments. Tether’s USDt (USDT), the world’s largest stablecoin by market capitalization, is rapidly closing the gap—and in some cases surpassing—Circle’s USDC on BitPay, one of the most widely used crypto payment platforms globally.
Once the undisputed leader in stablecoin transaction volume and count on BitPay, USDC has seen a significant decline in usage since early 2025. Meanwhile, USDT has gained substantial ground, now accounting for nearly half of all stablecoin transactions and over 70% of transaction value processed through the platform.
This transformation raises important questions about user preferences, regulatory influence, and the evolving dynamics between two of the most prominent stablecoins in the digital asset ecosystem.
The Decline of USDC on BitPay
At the beginning of 2024, USDC dominated BitPay's stablecoin landscape. In January 2024 alone, it accounted for 85% of all stablecoin transactions, while USDT trailed far behind at just 13%. This overwhelming preference for USDC was driven by its strong regulatory positioning, transparency, and growing institutional adoption.
However, by May 2025, that dominance had eroded significantly. USDC’s transaction share dropped to 56%, while USDT surged to 43%—a clear sign of shifting market sentiment.
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Despite Circle’s successful public listing on June 5, 2025—raising $1.05 billion in an expanded IPO—and its milestone regulatory approval under the European Union’s Markets in Crypto-Assets (MiCA) framework in July 2024, these advantages have not translated into sustained user preference on payment platforms like BitPay.
USDT Takes the Lead in Transaction Volume
While USDC still holds a slight edge in transaction count as of mid-2025, USDT has already overtaken it in total transaction volume. According to BitPay, starting in March 2025, USDT began processing more than 70% of all stablecoin payment value on the platform.
“USDC was the most used token in 2024. However, from March 2025 onward, USDT gained a considerable share of transaction volume, exceeding 70% of stablecoin value processed,” said BitPay.
This shift is attributed to two key factors:
- A steady increase in overall stablecoin transaction volume.
- A growing preference among both merchants and consumers for USDT over USDC.
Bill Zielke, BitPay’s Head of Revenue, noted that while the platform maintains a strong user base in Europe, its primary growth focus remains the United States—where USDT’s liquidity, availability, and network effects give it a competitive advantage.
“Back in 2024, USDC transactions were almost double those of USDT,” Zielke explained. “Now in 2025, we’re seeing a reversal in momentum.”
Why Are Users Switching to USDT?
Several underlying factors explain why users and merchants are increasingly favoring USDT despite Circle’s regulatory wins:
1. Liquidity and Market Penetration
USDT remains the most liquid stablecoin across global exchanges and decentralized platforms. Its deep integration into trading pairs, DeFi protocols, and cross-border remittance systems makes it the default choice for many users.
2. Merchant Adoption and Settlement Preferences
Many merchants using BitPay report faster settlement times and lower friction when receiving payments in USDT. With broader wallet support and fewer compatibility issues, USDT offers smoother operational workflows.
3. User Familiarity and Trust
Despite past scrutiny, Tether has built strong brand recognition over more than a decade. For retail users, especially outside regulated markets, USDT is often synonymous with stablecoins.
4. Global Accessibility
Unlike Circle, which has actively pursued compliance with MiCA and other Western regulations, Tether has chosen a different path—opting for wider global access over strict regional compliance. While this approach has drawn criticism, it allows USDT to remain available in regions where USDC may be restricted or unavailable.
Regulatory Divergence: MiCA and IPO Strategies
The contrast between Circle and Tether extends beyond technology and market performance—it reflects fundamentally different philosophies on regulation and corporate structure.
Circle: Regulatory First Approach
- Became the first global stablecoin issuer approved under MiCA in July 2024.
- Went public on June 5, 2025, raising $1.05 billion.
- Emphasizes transparency, audited reserves, and alignment with traditional financial frameworks.
Tether: Decentralized Growth Model
- Has publicly criticized aspects of MiCA, arguing they could stifle innovation.
- Confirmed it has no plans for an IPO, with CEO Paolo Ardoino stating Tether prefers to remain privately controlled.
- Focuses on global scalability rather than regional compliance alone.
This divergence highlights a broader debate in the crypto industry: Should stablecoins prioritize regulatory acceptance in developed markets or maximize accessibility worldwide?
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Market Cap Growth: A Different Story
Interestingly, while USDC is losing ground on BitPay, it has experienced impressive growth in market capitalization over the past year.
According to CoinGecko:
- USDC market cap increased by 88%, rising from $33 billion to $61.7 billion.
- Over the same period, USDT grew by 40%, from $112.5 billion to $158.3 billion.
Moreover, in 2025 alone, USDC’s market cap has grown by 41%, compared to just 15.5% for USDT—suggesting strong institutional inflows and usage in DeFi and lending markets.
This indicates that on-chain utility and payment usage may be diverging: while USDC thrives in financial infrastructure (like lending protocols), USDT dominates real-world spending and merchant payments via platforms like BitPay.
Frequently Asked Questions (FAQ)
Q: Why is USDT gaining popularity over USDC on payment platforms?
A: USDT benefits from higher liquidity, wider merchant acceptance, faster settlement, and greater global availability—especially in emerging markets where access to regulated stablecoins may be limited.
Q: Does Circle’s MiCA approval give USDC an edge?
A: Yes—in regulated environments like the EU, MiCA approval enhances trust and legal clarity for institutions. However, this advantage doesn’t always translate into consumer preference for everyday transactions.
Q: Is Tether avoiding regulation?
A: Not exactly. Tether complies with applicable laws but has criticized certain regulatory frameworks like MiCA as overly restrictive. It chooses not to seek formal authorization under MiCA at this time.
Q: Can USDC regain its lead on BitPay?
A: It’s possible. If BitPay expands its institutional partnerships or integrates new features favoring regulated stablecoins, USDC could rebound—especially if compliance becomes a bigger priority for users.
Q: Are there risks associated with using USDT instead of USDC?
A: Some investors perceive USDT as having higher counterparty risk due to past transparency concerns. However, Tether now publishes regular attestations and holds substantial reserves. Both coins are generally considered safe for short-term transactions.
Q: How does this affect the future of crypto payments?
A: The competition between USDT and USDC reflects a maturing ecosystem where different stablecoins serve different purposes—USDC for regulated finance, USDT for global payments.
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Final Thoughts
The battle between USDT and USDC is far from over. While Circle has made strategic advances in regulation and public market credibility, Tether continues to dominate in real-world usage—particularly in payment networks like BitPay.
For users and businesses alike, the choice between stablecoins will increasingly depend on context: compliance needs, geographic reach, liquidity requirements, and ease of use.
As adoption grows and use cases diversify, both stablecoins are likely to coexist—serving complementary roles in a decentralized financial future.
Disclaimer: The information provided in this article does not constitute financial advice or investment recommendations. Cryptocurrency investments carry risk, and individuals should conduct their own research before making any decisions.