As the competition in the stablecoin market becomes increasingly intense, USDC issuer Circle is facing unprecedented challenges. Several financial giants have entered the fray, signaling the impending outbreak of a fierce stablecoin battle.

The USAT stablecoin launched by Tether has garnered widespread attention in the market. This stablecoin, fully compliant with the GENIUS Act, has its reserves held by Anchorage Digital Bank, which not only avoids the risks similar to the 2023 Silicon Valley Bank incident but also aims to reduce operational costs and increase yields. In contrast, the compliance level of USDT is only 80%, and the emergence of USAT directly targets the compliance needs of institutional investors.
At the same time, Hyperliquid's native stablecoin USDH has also entered the competition. Currently, Hyperliquid has locked up 7.5% of the total USDC supply, and its launch of USDH may further weaken Circle's market share. In addition, fintech companies like Robinhood and Revolut are also preparing to launch their own stablecoins, which will undoubtedly intensify liquidity competition in the market.
Facing these challenges, Circle has not sat idly by. The company is developing a dedicated blockchain called Arc, aimed at enhancing the speed, security, and interoperability of USDC to consolidate its leading position in the digital finance space. However, JPMorgan has issued a warning: given that the stablecoin market is valued at USD 291 billion, it will be a zero-sum game unless the entire cryptocurrency market experiences significant growth. Notably, since 2020, the market share of US stablecoin issuers has hovered below 8%.
As the battle for stablecoins approaches, market participants need to closely monitor the situation and adjust their strategies in a timely manner to seize potential investment opportunities. This major conflict will not only reshape the landscape of the stablecoin market but may also have a profound impact on the entire cryptocurrency ecosystem.