Tether’s $181B paradox: How USDT keeps growing as its market share collapses under MiCA

Tether’s USDT fell from 70% market dominance in November 2024 to 59.9% by October 2025, the second sub-60% reading in a single year, while Circle’s USDC climbed from 20.5% to 25.3% over the same span.

The shift coincides with Europe’s Markets in Crypto-Assets (MiCA) regulation enforcement, but the dynamics tell a more complex story than simple regulatory displacement.

The European Union’s MiCA framework rolled out in two phases. The first stablecoin-specific provisions took effect June 30, 2024, while broader crypto-asset service provider requirements began Dec. 30, 2024.

Supervisors instructed platforms to halt offerings of non-compliant stablecoins immediately, though ESMA granted a sell-only wind-down window through the end of the first quarter to prevent user disruption.

Major European exchanges responded by delisting or restricting USDT pairs ahead of the April deadline.

Tether acknowledged the regulatory headwinds by investing in StablR, a Malta-licensed electronic money institution, on Dec. 17, 2024. The move mirrored an earlier investment in Quantoz, another MiCA-aligned issuer backed by Tether’s Hadron platform.

Rather than modify USDT directly, Tether positioned itself behind entities authorized under European oversight.

The denominator effect

Filippo Armani, data researcher at Dune, frames USDT’s dominance decline as primarily mathematical rather than existential.

In a commentary shared with CryptoSlate, he explained:

“The pie expanded faster via USDC and USDe while USDT still grew strongly in absolute terms. Tether’s supply surged from $89.1 billion in November 2023 to $133.9 billion by November 2024 and $180.9 billion by October 2025.”

Armani added that USDC vaulted from $24.3 billion to $76.3 billion over the same period, while Ethena’s USDe emerged from near-zero to $12.2 billion in the same period.

Although he acknowledged that MiCA’s stablecoin rules pushed major venues to curb or delist USDT pairs by April 2025, nudging share toward compliant alternatives like USDC.

Yet, this movement is a regional dynamic, not evidence of shrinking global USDT demand.

The data support that assessment. USDT added nearly $50 billion in supply between November 2024 and October 2025, even as its percentage share contracted.

USDC’s percentage gains reflect accelerated adoption in compliant jurisdictions rather than wholesale migration from Tether’s product.

Nikolaos Kostopoulos, blockchain senior consultant at Netcompany SEE & EUI, also sees MiCA’s impact as geographically bounded.

“While MiCA has undoubtedly constrained USDT’s footprint in Europe, its overall impact on Tether’s global dominance remains limited. USDT continues to thrive in offshore and emerging markets beyond the EU perimeter, where regulatory arbitrage still exists.”

Strategic countermoves

Tether’s investments in StablR and Quantoz address European market access without diluting USDT’s brand or supply.

Both platforms operate under Electronic Money Institution licenses that satisfy MiCA requirements, allowing European venues to list their tokens without regulatory exposure.

Armani expects this strategy to boost “Tether-ecosystem share in the EU, not necessarily USDT’s own dominance,” since separate tickers prevent direct attribution to Tether’s flagship product.

The company telegraphed broader ambitions through USAT, a planned US-regulated stablecoin designed for GENIUS Act compliance.

Armani views the domestic launch as a mechanism to “reclaim share stateside once live,” particularly among institutional buyers prioritizing regulatory clarity.

Meanwhile, Tether Gold (XAUT) reached $1.6 billion in market capitalization, and the company’s Plasma Layer-1 integration enables zero-fee USDT transfers and yields exceeding 10% through partner neobanks.

Kostopoulos views Tether’s EU-focused subsidiaries as unlikely to reverse the dominance slide.

He added that exchanges and institutional players from the eurozone are already focusing on a new, fully regulated stablecoin based on the euro, driven by nine European banks.

Nevertheless, Kostopoulos stated:

“The more structural drivers ahead lie not within MiCA itself, but in new entrants such as World Liberty Financial’s stablecoin and the broader political and commercial interests shaping the next generation of stablecoins.”

The competitive landscape extends beyond regulatory compliance.

Traditional finance institutions prepare stablecoin launches with built-in banking relationships and institutional trust.

Stripe unveiled a platform to fast-track the creation of stablecoins, Visa plans to help banks issue their own tokenized fiat currencies, and many others are joining the movement.

Tether’s USDT absolute growth, doubling supply in two years, demonstrates durable demand outside regulated markets. It also illustrates how regional dynamics are not enough to curb USDT’s growth.

The question becomes whether Tether’s investments in compliant subsidiaries and US-focused products can compete for institutional flows against entities structured for regulatory environments from inception.

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