In a striking shift within the stablecoin landscape, Tether’s USDT has surged on the BitPay payment network, capturing a growing share of transactions and volumes at the expense of Circle’s USDC. The transformation, unfolding throughout early 2025, reflects changing merchant and consumer preferences — even as USDC maintains regulatory advantages and strong market cap growth.
The Stablecoin Shift on BitPay
At the beginning of 2024, USDC held a commanding lead on BitPay, processing 85% of stablecoin transactions, while USDT trailed with just 13%. Fast forward to May 2025, and the balance has dramatically reversed. USDC’s transaction share dropped to 56%, while USDT’s climbed to 43% — a net shift of nearly 30 percentage points in favor of Tether’s token.
This pivot isn’t limited to transaction frequency. When it comes to payment volume, USDT now dominates. Starting in March 2025, USDT accounted for over 70% of stablecoin transaction value processed through BitPay, signaling not just more usage, but larger-scale adoption across merchants and high-value payments.
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Why USDT Is Winning Merchant Adoption
Several factors are driving this shift:
- Network effects and liquidity: USDT has long been the most widely traded and held stablecoin globally. Its deep liquidity across exchanges and wallets makes it a default choice for users who prioritize ease of access and fast settlement.
- Merchant integration preferences: Many merchants on BitPay report integrating USDT first due to customer demand and lower friction in cross-border settlements.
- User familiarity: Especially in emerging markets, USDT is often the first stablecoin users encounter, making it a natural choice for payments.
Bill Zielke, Chief Revenue Officer at BitPay, acknowledged the trend: “While USDC still leads in total transaction count, its dominance is clearly eroding. We’re seeing a clear preference emerging for USDT in both volume and momentum.”
Regulatory Edge vs. Market Reality
One of the most intriguing aspects of this shift is that it’s happening despite Circle’s strong regulatory positioning. In July 2024, USDC became the first major stablecoin to receive formal authorization under the Markets in Crypto-Assets Regulation (MiCA) in the European Union — a milestone that was expected to boost its global credibility and adoption.
Yet, regulatory approval hasn’t directly translated into payment platform dominance. Tether has taken a different path, publicly criticizing certain MiCA requirements and confirming it will not comply with the framework. CEO Paolo Ardoino emphasized that Tether prioritizes global flexibility over regional compliance, allowing it to serve markets where regulatory clarity is still evolving.
Moreover, while Circle made headlines with its public market debut in June 2025, Tether has maintained a private structure, with no plans for an IPO. This operational independence may contribute to faster decision-making and agility in responding to market demands.
Market Cap Growth Tells a Different Story
Despite losing ground on BitPay, USDC is far from fading. In fact, its market capitalization has seen robust expansion:
- Over the past year, USDC’s market cap grew by 88%, rising from $33 billion to $61.7 billion.
- Year-to-date in 2025, it has surged another 41%.
- In comparison, USDT’s market cap increased by 40% over the past 12 months (from $112.5B to $158.3B) and rose only 15.5% year-to-date.
This divergence suggests a critical insight: USDC is gaining traction as a reserve and institutional asset, while USDT is increasingly favored for real-world payments and transactional use.
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Core Trends Shaping the Stablecoin Battle
The BitPay data reflects broader dynamics in the stablecoin ecosystem:
- Usage segmentation: Stablecoins are no longer one-size-fits-all. USDC is becoming a preferred instrument for DeFi protocols, institutional custody, and regulated environments. USDT, meanwhile, dominates in peer-to-peer transfers, remittances, and merchant payments.
- Regulation vs. utility trade-off: While compliance enhances trust, it can limit accessibility. Tether’s strategy appears to bet on utility and global reach outweighing short-term regulatory endorsements.
- Platform influence: Payment processors like BitPay act as real-time barometers of user behavior. Their data offers unfiltered insight into which stablecoins people actually use — not just hold.
Frequently Asked Questions (FAQ)
Why is USDT gaining popularity on BitPay despite regulatory concerns?
USDT’s growth stems from its widespread availability, high liquidity, and user familiarity. Many consumers and merchants prioritize seamless transactions over regulatory labels, especially in regions where crypto regulation remains ambiguous.
Is USDC losing relevance in the stablecoin market?
No. While USDC is losing share in payment platforms like BitPay, it’s gaining strength in institutional adoption and regulated financial applications. Its MiCA approval and public company status enhance its credibility for compliant use cases.
Does Tether’s refusal to comply with MiCA pose risks?
Potentially. Non-compliance could limit Tether’s access to EU-based financial infrastructure and regulated platforms. However, Tether may be calculating that the benefits of global operability outweigh the costs of exclusion from certain regulated markets.
Are stablecoin market caps a reliable indicator of usage?
Not always. Market cap reflects total supply but not velocity or purpose. A coin can have a high market cap due to reserves or speculative holdings but low transaction volume. For real-world usage, metrics like payment share and transaction value (as seen on BitPay) are more telling.
Could USDT overtake USDC entirely on BitPay?
It’s possible. With USDT already leading in transaction value and closing rapidly in transaction count, continued momentum could see it surpass USDC in both categories by late 2025 — especially if merchant onboarding trends persist.
What does this mean for the future of digital payments?
The rise of USDT on payment networks signals growing confidence in blockchain-based transactions for everyday commerce. As stablecoins become more integrated into point-of-sale systems and e-commerce platforms, we may see a bifurcated ecosystem: one stablecoin for holding value (USDC), another for spending it (USDT).
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Final Thoughts
The battle between USDT and USDC is no longer just about which stablecoin is bigger — it’s about which use case wins. On BitPay, the trend is clear: USDT is becoming the go-to for spending, while USDC strengthens its role as a trusted store of value.
This functional divergence may ultimately benefit the entire crypto economy by enabling specialization — much like how different fiat currencies serve different roles in global finance. As adoption grows, platforms that support both utility and compliance will likely lead the next phase of innovation.
For users, merchants, and investors alike, understanding these shifts is key to navigating the evolving digital asset landscape — where real-world usage increasingly drives value.
Core Keywords: USDT, USDC, BitPay, stablecoin adoption, crypto payments, Tether, Circle, MiCA regulation