USDC Displaces Tether. Is This the End of USDT Dominance in Europe?

This revolution is not happening in a vacuum. Stablecoins, these seemingly boring cryptocurrencies that were supposed to be a safe haven in the turbulent crypto ocean, are turning the entire market upside down. In just a few months, all the previous rules of the game have been overturned - and not by speculators or market whales, but by... European Union regulations. The story of two giants - USDT and USDC - is a fascinating tale of how regulations can decide the fate of billion-dollar financial empires.

Stablecoins - Calm Waters in a Turbulent Crypto Ocean

Before we dive into the main story, it's worth recalling what stablecoins actually are. These are cryptocurrencies that were meant to solve one of the biggest problems of the entire market - insane volatility. While Bitcoin can jump 10% in a day, stablecoins try to maintain a stable value - most often one US dollar.

Sounds simple? In theory, yes, but the devil is in the details. How do you maintain stable value in a world where everything changes? This is where the differences between our protagonists - USDT and USDC - begin.

Tether - The Dark Lord of Stablecoins

USDT, known as Tether, is a true phenomenon of the cryptocurrency market. Imagine a company that earns more than BlackRock - one of the world's largest asset managers. In 2023, Tether Holdings achieved a profit of $6.2 billion, beating BlackRock by $700 million. These are astronomical numbers for a company that theoretically only deals with "storing" dollars.

But who actually stands behind this empire? The main figure is Giancarlo Devasini - a former plastic surgeon who now manages assets worth $120 billion from his villa on the French Riviera and reportedly leads a very solitary lifestyle.

Tether Limited, the issuer of USDT, is headquartered in Hong Kong and belongs to the same parent company as the Bitfinex exchange. This is already the first warning signal - the connection between a stablecoin issuer and a cryptocurrency exchange can lead to conflicts of interest.

The Mystery of Tether's Reserves

For years, USDT's biggest pain point was lack of transparency. The company long refused to disclose what actually "backs" its tokens. Investors had to take it on faith that every USDT in circulation was backed by a real dollar in the bank.

When Tether finally started publishing reports, it turned out that reserves were not just cash, but also loans, securities, and other assets. It's a bit like a bank saying: "Your money is safe because we have it in cash... well, maybe not all of it, but also in stocks, bonds, and a loan to my cousin".

USDC - The White Knight from the United States

On the other pole, we have USDC - USD Coin. This is the child of cooperation between Circle from Boston and the Coinbase exchange. From the very beginning, USDC played by different rules - transparency, regulations, cooperation with authorities.

Circle, the company behind USDC, debuted on the New York Stock Exchange in June 2025, raising $1.1 billion at a valuation of $6.2 billion. This shows a completely different approach - instead of hiding in tax havens, Circle enters the world's largest stock exchange.

Transparency as a Competitive Weapon

USDC has emphasized transparency from the beginning. Circle regularly publishes weekly reports on reserves and undergoes monthly audits conducted by third parties. This is a difference like night and day compared to Tether's approach.

Additionally, USDC is fully backed by cash and liquid assets - without complicated structures and dubious loans. For an investor, this means a simple matter: one USDC token = one US dollar in the bank.

The European Revolution - The Entry of MiCA Regulations

The real revolution began on December 30, 2024, when the MiCA (Markets in Crypto-Assets) regulation came into effect. This EU law was meant to organize the chaos prevailing in the cryptocurrency market.

MiCA is not just another bureaucratic regulation. It's a comprehensive system that classifies stablecoins into electronic money tokens (EMT) and asset-referenced tokens (ART). Sounds technical? It boils down to a simple principle: if you want to operate in Europe, you must be 100% transparent.

The Day USDT Disappeared from Europe

On March 31, 2025, Binance - the world's largest cryptocurrency exchange - made a decision that shook the market. USDT and several other stablecoins were withdrawn from trading for users from the European Economic Area.

The list of excluded tokens was long: USDT, DAI, FDUSD, TUSD, USDP, AEUR, UST, USTC, and PAX Gold. Users could still store and withdraw them, but trading was closed. It's a bit like suddenly banning the sale of Coca-Cola in stores, but you could still drink it at home.

Similar steps were taken by other exchanges - Kraken also withdrew USDT, and Coinbase removed it from listings due to the anticipated impact of MiCA.

Why USDC Is Gaining the Upper Hand

In this regulatory turmoil, USDC proved to be significantly better prepared. Circle obtained an electronic money institution (EMI) license in the EU, which means full compliance with MiCA. It's like the difference between a driver with a valid license and one who drives without documents.

Market Capitalization in Motion

The effects are already visible in the numbers. USDC's market capitalization grew by more than $5 billion in just two months, becoming the main stable token on the Ethereum platform. This shows how quickly the balance of power in the cryptocurrency market can change.

USDC stands out with several key advantages:

• Full MiCA compliance - meets all regulatory requirements in the EU

• Transparency - regular reports and audits

• Stability and trust - recognition by financial institutions worldwide

• Multi-network availability - available on various blockchains

Market Concentration - Risk or Opportunity?

Despite growing competition, the stablecoin market remains highly concentrated. Tether still controls about 65% of the total market capitalization of the 10 largest stablecoins worth about $220 billion, while USDC holds another 25%.

This means that two entities control 90% of the market. Analysts warn that such high concentration carries systemic risk. A single entity can halt redemptions or freeze funds under regulatory pressure.

Who Actually Benefits from This Game?

The Tether Empire

The numbers associated with Tether are impressive. The company's assets currently amount to $120 billion - mainly in safe US Treasury bonds, but also in bitcoin and gold. These are larger managed assets than many banks.

However, the ownership structure of Tether Holdings remains largely secret, and the company's activities are hidden from the US and EU governments. This raises questions about actual control over such enormous assets.

Circle and Its Investors

On the other side, we have Circle - a company that from the beginning emphasized transparency and cooperation with regulators. It raised over $135 million in venture capital, including $50 million from Goldman Sachs. In 2022, Circle announced a funding round worth $400 million with participation from BlackRock and Fidelity Investments. After its NYSE debut in 2025, the company is valued at $6.9 billion.

What Does This Mean for the Average Investor?

For someone just starting their cryptocurrency adventure, this story may seem complicated, but it boils down to several simple conclusions:

• First, regulations are changing the rules of the game. What was acceptable just a year ago may be illegal today.
• Second, transparency is becoming a key competitive factor. Investors increasingly choose projects that are open to control and audits.
• Third, market concentration carries both benefits and risks. On one hand, large players offer stability; on the other, they can abuse their position.

The Future of the Stablecoin Market

Does USDC actually displace USDT? For now, we're talking more about geographical shifts than a global change of power. USDT is withdrawing from Europe but still dominates in other regions - for example, Asian.

We're probably facing a world of many stablecoins, where different tokens will dominate in different regions. Europe may become a bastion of USDC, while other parts of the world remain loyal to USDT.

Conclusions for Traders and Investors

This story shows how important it is to track not only prices but also regulatory changes. A trader who didn't pay attention to MiCA regulations could have been surprised by the sudden withdrawal of USDT from European exchanges.

For long-term investors, regulatory trends are crucial. Projects that proactively cooperate with regulators have better chances of survival and development.

The USDT vs USDC story is also a lesson about the importance of fundamentals. The biggest player doesn't always win - sometimes the one who better prepared for changes wins.

The cryptocurrency market continues to develop and surprise. What seems certain today may be turned upside down tomorrow. The only certainty is that regulations will play an increasingly important role in shaping the future of this industry - especially in Europe.