Circle's USDC captured 64% of adjusted stablecoin transaction volume in Q1 2026, surpassing Tether's USDT for the first time since 2019, according to Mizuho Securities. Year-to-date adjusted volumes stood at approximately $2.2 trillion for USDC versus $1.3 trillion for USDT. The reversal marks a ...
"USDC is the more popular option when it comes to everyday, real-world applications... Circle's stablecoin is used more for payments." — Dan Dolev, Mizuho Securities Senior Analyst
Circle's USDC captured 64% of adjusted stablecoin transaction volume in Q1 2026, surpassing Tether's USDT for the first time since 2019, according to Mizuho Securities. Year-to-date adjusted volumes stood at approximately $2.2 trillion for USDC versus $1.3 trillion for USDT. The reversal marks a structural shift in how institutional capital flows through dollar-denominated digital assets.
Tether responded by burning 6.5 billion USDT in January and February 2026 — the two largest consecutive monthly burns in its history — compressing its market capitalization from $186.8 billion to $183.6 billion. CryptoQuant's 60-day average USDT market cap change turned negative for the first time since Q3 2023. Meanwhile, USDC supply has risen 220% since late 2023 to approximately $78 billion, fueled by B2B settlement integrations with Visa and Stripe, and a regulatory tailwind from the GENIUS Act signed into law in July 2025.
The total stablecoin market stands at $317 billion as of April 2026. Transaction volumes reached $33 trillion in 2025 — exceeding Visa's $15.7 trillion and Mastercard's $9.8 trillion in annual card payment throughput. USDC accounted for $18.3 trillion of that total; USDT recorded $13.3 trillion, according to Bloomberg data.
Mizuho Securities published a report on March 13, 2026, showing USDC had overtaken USDT in adjusted on-chain transaction volume year-to-date. The bank's methodology strips out wash trading, bot activity, and inter-exchange transfers to measure organic economic throughput.
The numbers: USDC processed approximately $2.2 trillion in adjusted transfers through Q1 2026. USDT managed roughly $1.3 trillion. USDC's share stood at 64% of adjusted volume — a reversal from the 2019–2025 period when USDT consistently held majority share and USDC averaged approximately 30%.
Mizuho attributed the shift to three demand vectors: (1) institutional programmatic settlement, with USDC's average transfer size of $557 reflecting high-frequency automated flows; (2) prediction market collateral, with platforms like Polymarket using USDC as their primary settlement token; and (3) the early emergence of agentic commerce, where autonomous software agents execute transactions on behalf of users.
The divergence between supply and volume tells its own story. USDT holds $184 billion in circulating supply versus USDC's $78 billion, yet USDC moves more value per dollar of supply. Each dollar of USDC in circulation is being used more frequently and for more real-economy transactions.
Tether burned 3.0 billion USDT in January 2026 and 3.5 billion USDT in February, according to Whale Alert and CryptoQuant data. The combined $6.5 billion in burns compressed USDT's market capitalization from $186.8 billion to $183.6 billion — the first back-to-back monthly declines since the institutional collapses of late 2022.
Burns occur when holders redeem USDT for fiat. Tether removes the redeemed tokens from circulation to maintain its 1:1 peg. Consecutive burns of this magnitude signal net capital outflow from the USDT ecosystem.
CryptoQuant's 60-day average USDT market cap change metric turned negative in February 2026. The last occurrence was Q3 2023. The data does not prove a bear market trigger, but it correlates historically with periods of reduced risk appetite in crypto markets.
Some context: USDT supply had grown almost continuously from mid-2023 through late 2025, peaking near $187 billion. The current contraction represents a 1.7% drawdown from peak — modest in absolute terms but directionally significant given the asset's historical trajectory.
Tether has also expanded its multi-chain distribution strategy, launching USDT on the Celo Network on April 1, 2026, targeting Celo's 14 million Opera MiniPay users in emerging markets. The move suggests Tether is competing on distribution breadth even as its aggregate supply contracts.
The infrastructure behind USDC's volume growth is corporate, not retail.
Visa launched USDC settlement in the United States in late 2025, following a $3.5 billion annualized stablecoin settlement pilot. Initial banking partners — Cross River Bank and Lead Bank — began settling with Visa in USDC over the Solana blockchain. Visa is also serving as a lead design partner for Circle's Arc blockchain and plans to operate a validator node.
Stripe integrates Visa's USDC settlement into its merchant stack, allowing businesses to opt into stablecoin-based settlement rails. Circle provides the liquidity layer and compliance framework. The combination of Visa's network reach and Stripe's merchant base creates a distribution channel that does not require end users to hold or understand stablecoins.
Circle Payments Network (CPN): On April 9, 2026, Circle launched CPN Managed Payments, a service that lets payment providers, fintechs, and banks use blockchain-based rails without holding digital assets. The platform "abstracts digital asset complexity, enabling partners to interact solely in fiat while Circle manages the entire digital asset lifecycle," according to Circle's announcement. This effectively removes the last friction point — the requirement that participants hold crypto — from the settlement chain.
B2B stablecoin payments grew from under $100 million monthly in early 2023 to more than $6 billion monthly by mid-2025. That segment now represents approximately 60% of real-economy stablecoin volume, with 77% of corporate users citing supplier payments as their primary use case.
The GENIUS Act, signed July 18, 2025, created the first federal regulatory framework for payment stablecoins. It requires 1:1 reserve backing, monthly public disclosures, and alignment with federal AML and sanctions rules. Final implementing regulations are due by July 18, 2026, with full enforcement starting no later than January 18, 2027.
The law applies to any stablecoin used by U.S. persons, regardless of where the issuer is domiciled. This creates a compliance asymmetry:
Circle is a U.S. company, now publicly traded on the NYSE (ticker: CRCL), with SEC reporting obligations. Its reserves are held in U.S. Treasuries and managed by BlackRock. Circle's corporate structure is already aligned with most GENIUS Act requirements.
Tether is domiciled in the British Virgin Islands and has historically provided limited reserve transparency. CEO Paolo Ardoino announced in March 2025 that the company was engaging a Big Four accounting firm for a full reserve audit. As of April 2026, the results of that engagement have not been made public.
The FDIC issued a proposed rulemaking on April 7, 2026, establishing standards for bank-issued stablecoins. Under the proposal, issuers must maintain reserve assets on at least a 1:1 basis, with capital, liquidity, and risk management requirements. The first bank-issued stablecoins could appear by late 2026 or early 2027, adding new competition to both USDC and USDT.
Four U.S. agencies — the FDIC, OCC, Federal Reserve, and FinCEN — launched coordinated GENIUS Act rulemaking in early April. The parallel tracks cover prudential standards, chartering requirements, and anti-money-laundering obligations.
Circle priced its IPO at $31 per share, above its $27–$28 target range, valuing the company at approximately $18 billion. The stock closed at $82.84 on its first trading day — a 167% premium. As of April 2026, CRCL trades near $85, down from an all-time high that represented roughly 700% appreciation from IPO price before retracing.
Q4 2025 earnings showed revenue of $770 million, with trailing twelve-month revenue at $2.7 billion. EPS came in at $0.56, exceeding the $0.16 consensus estimate. However, TTM net income remains negative at approximately -$69.5 million. Q1 2026 earnings are expected May 23, with analyst consensus EPS of $0.17.
Mizuho raised its Circle price target to $120 from $100 following the USDC volume data. Compass Point moved in the opposite direction, downgrading CRCL from neutral to sell with a $77 target on April 9, citing margin pressure and increased competition from bank-issued stablecoins under the GENIUS Act framework.
The analyst disagreement reflects a fundamental tension: USDC volumes are growing, but Circle's revenue depends on interest earned on reserves — primarily U.S. Treasuries. If the Federal Reserve cuts rates, Circle's revenue per dollar of USDC supply falls. Volume growth and revenue growth are not the same thing.
The stablecoin market is bifurcating along institutional versus retail lines.
USDC is becoming the settlement token of choice for regulated institutions: payment networks, enterprise platforms, and compliant DeFi protocols. Its infrastructure integration with Visa, Stripe, and institutional custody providers creates switching costs that compound over time.
USDT retains dominance in trading pairs on centralized exchanges, peer-to-peer remittance corridors in emerging markets, and as a store-of-value proxy in countries with currency instability. Its $184 billion supply dwarfs USDC's $78 billion. But supply and velocity are different metrics, and the velocity advantage has shifted.
The total stablecoin market at $317 billion remains concentrated: the top five stablecoins control approximately 87% of the market. USDS (formerly DAI) ranks third at $8.92 billion.
Morph projects total stablecoin settlement volume could exceed $50 trillion by end of 2026, with stablecoins capturing 5–10% of global cross-border payments by 2030. These projections assume continued institutional onboarding and stable regulatory environments — assumptions that remain uncertain.
The stablecoin market is undergoing a structural reordering. For six years, USDT's dominance was treated as a settled fact. The Q1 2026 volume data from Mizuho challenges that assumption — not by showing USDT losing ground in absolute terms, but by demonstrating that new institutional demand is flowing disproportionately through USDC.
The drivers are regulatory (GENIUS Act compliance), infrastructural (Visa/Stripe settlement), and commercial (Circle's CPN platform). These are not speculative catalysts; they are shipping products with measurable volume.
Tether's strategic response — expanding to new chains, pursuing a Big Four audit, and maintaining the largest supply base — may prove sufficient to retain its market position. But the competitive dynamics have shifted from a market defined by a single dominant issuer to one where regulatory compliance, institutional integration, and transaction velocity determine market share.
The July 2026 regulatory deadline and the arrival of bank-issued stablecoins will test whether this reordering accelerates or stabilizes. The data currently available supports the former.