JPMorgan: Competition Among US Stablecoins Intensifies as Liquidity Becomes a Winner-Takes-All Game

JPMorgan experts have cautioned that Circle’s

stablecoin is encountering heightened rivalry from emerging players such as Tether’s USAT—which fully complies with U.S. regulations—Hyperliquid’s USDH, and stablecoin projects from fintech leaders including and Revolut. According to the bank’s report, the stablecoin industry is undergoing rapid transformation, with new regulations and innovative strategies threatening to diminish USDC’s lead within the United States. As of mid-2025, stablecoins are collectively valued at about $278 billion, but their share of the broader crypto market has held steady at 8% since 2020. This stagnation raises concerns that new competitors may simply shift existing market share instead of expanding the sector as a whole Circle’s USDC at Risk? JPMorgan Warns of Intense Stablecoin War … [ 1 ].

Tether’s soon-to-launch USAT stablecoin is being marketed as a direct rival to USDC, boasting full compliance with the GENIUS Act to attract institutional capital. Unlike Tether’s current USDT—which analysts believe only meets about 80% of U.S. regulatory standards—USAT is set to be entirely backed by reserves kept at Anchorage Digital, a federally recognized bank. This structure is intended to reduce the types of risks that

experienced during the 2023 Silicon Valley Bank crisis, while also cutting operational expenses and enhancing profitability Circle’s USDC at Risk? JPMorgan Warns of Intense Stablecoin War … [ 1 ]. JPMorgan’s Nikolaos Panigirtzoglou highlighted that USAT’s focus on institutions could divert liquidity away from USDC, especially as interest in regulated stablecoins increases JPMorgan Predicts Intense Competition for Circle in Stablecoin [ 3 ].

Hyperliquid, a derivatives exchange in the crypto space, is preparing to roll out its own stablecoin called USDH, which could further impact USDC’s hold on the market. The platform is already responsible for 7.5% of all USDC usage, and the launch of USDH is likely to accelerate this trend.

analysts pointed out that exchanges like Hyperliquid are increasingly launching proprietary stablecoins to lessen reliance on outside issuers, a move that could further divide the market Circle’s USDC at Risk? JPMorgan Warns of Intense Stablecoin War … [ 1 ]. At the same time, fintech giants such as Robinhood and Revolut are developing their own stablecoins, intensifying competition for both liquidity and user engagement U.S. Stablecoin Battle Could Be Zero-Sum Game: JPMorgan [ 2 ].

Circle is taking proactive steps. The company is working on Arc, a blockchain built specifically for USDC transactions, in order to boost speed, security, and cross-platform compatibility. Through Arc, Circle hopes to reinforce USDC’s role as a core asset in digital finance despite mounting challenges. Still, JPMorgan warned that unless the overall crypto market expands, Arc’s benefits may not be enough to counter the increasingly zero-sum environment among U.S. stablecoin providers Circle’s USDC at Risk? JPMorgan Warns of Intense Stablecoin War … [ 1 ]. The bank also remarked that USDC’s supply has reached $72.5 billion, surpassing Bernstein’s forecast for 2025 by a quarter, though this growth might stall as competitors gain momentum U.S. Stablecoin Battle Could Be Zero-Sum Game: JPMorgan [ 2 ].

The analysts ultimately believe that unless the cryptocurrency market as a whole experiences substantial expansion, the U.S. stablecoin sector will likely remain a zero-sum arena. Historically, the supply of stablecoins has closely followed the market capitalization of cryptocurrencies overall, which has limited the segment’s growth. With saturation already present and regulatory oversight rising, JPMorgan predicts that competition will likely center on capturing existing liquidity rather than creating new demand JPMorgan Predicts Intense Competition for Circle in Stablecoin [ 3 ].