Circle's USDC captured 70% of adjusted stablecoin transaction volume in the first half of 2026, according to Visa's Onchain Analytics Dashboard — the widest gap over Tether's USDT ever recorded. Adjusted volume hit a record $1.79 trillion in June alone, up 125% year-over-year. USDC processed $1.2...
"USDC has processed about $2.2 trillion in adjusted transaction volume so far in 2026, compared with $1.3 trillion for Tether." — Dan Dolev, Senior Analyst, Mizuho Securities
Circle's USDC captured 70% of adjusted stablecoin transaction volume in the first half of 2026, according to Visa's Onchain Analytics Dashboard — the widest gap over Tether's USDT ever recorded. Adjusted volume hit a record $1.79 trillion in June alone, up 125% year-over-year. USDC processed $1.21 trillion of that total; USDT handled $576 billion.
The volume dominance has not translated into stock market confidence. Morgan Stanley downgraded Circle Internet Group (NYSE: CRCL) to Underweight on August 3, slashing its price target 64% from $106 to $38. Mizuho cut to Underperform at $45 in July. The stock has fallen approximately 30% year-to-date. The core concern: Open USD, a 140-member consortium including Visa, Mastercard, Stripe, BlackRock, and Coinbase, threatens to commoditize the stablecoin issuance layer and compress Circle's margins on reserve income — the source of 85%+ of its revenue.
The stablecoin market is splitting into two distinct competitions. One is for transaction volume, where USDC has already won. The other is for the economic rent that accrues to the issuer, where Circle's position is deteriorating.
Visa's Onchain Analytics Dashboard, built in partnership with Allium Labs, strips out bot activity, exchange-to-exchange transfers, and smart contract internal transactions to measure what it calls "adjusted volume" — an approximation of real economic activity. The methodology filters out addresses exceeding 1,000 transactions or $10 million in transfer volume within any 30-day period.
By this measure, the stablecoin market produced $8.82 trillion in adjusted volume during H1 2026. USDC accounted for approximately $6.17 trillion of that total, or 70%. USDT contributed roughly $2.21 trillion, or 25%. PayPal's PYUSD and all other stablecoins split the remaining 5%.
The gap has been consistent month-over-month. In February 2026, when adjusted volume first set a record near $1.78 trillion, USDC already commanded $1.26 trillion against $514 billion for USDT. By June, the record moved to $1.79 trillion, with USDC at $1.21 trillion (67%) and USDT at $576 billion (32%).
This represents a structural reversal. In 2020, USDT accounted for nearly 90% of adjusted stablecoin transaction volume. USDC held less than 10%. The crossover occurred in late 2025, according to data referenced in CoinDesk reporting, and has since widened.
The market capitalization picture tells a different story. USDT circulating supply stands at approximately $184 billion; USDC at roughly $75 billion. By this metric, Tether still holds a 2.5:1 advantage. The divergence between volume share and supply share is the defining feature of the current stablecoin market.
Coinbase's Base network processed $565 billion in adjusted stablecoin volume in June 2026, or 31.5% of the global total, according to Visa's dashboard. Ethereum mainnet followed at $562 billion. Solana ranked third.
Base's rise as the dominant stablecoin settlement layer tracks with Coinbase's strategic focus. The company reported stablecoin transaction volumes on Base growing 10x year-over-year through Q1 2026. Over the trailing 12 months, Base processed $32 trillion in total transfer volume. Over 90% of agentic (AI-driven) stablecoin transactions now settle on Base, according to Coinbase disclosures.
The network distribution matters because it reveals where the economic utility of stablecoins concentrates. Base and Ethereum together handled 63% of June's adjusted volume. This concentration creates a structural advantage for USDC, which is natively supported on both networks and deeply integrated into Coinbase's product suite.
USDT's volume, by contrast, has historically concentrated on Tron, which Visa's adjusted methodology discounts more heavily due to the network's higher proportion of automated and high-frequency transfers.
The European Union's Markets in Crypto-Assets (MiCA) regulation reached its final enforcement deadline on July 1, 2026. Tether never applied for e-money token authorization. As a result, MiCA-licensed exchanges including Coinbase Europe, Kraken, Crypto.com, and Binance removed USDT trading pairs for European users in a phased process that began in December 2024 and completed by mid-2026.
USDT's market capitalization fell $5.4 billion between May and July 2026, dropping from approximately $190 billion to $184 billion, according to CryptoSlate data. Its share of total stablecoin market cap declined from over 70% in October 2025 to 62.5% by June 2026, per CoinLaw tracking.
Tether reported $1.5 billion in net operating profit for Q2 2026 and expanded its reserve surplus to $4.11 billion. The company holds more than 146 tons of physical gold. Its financial position remains strong despite the market share erosion.
Tether's response to competitive pressure has been geographic and product diversification. The company is developing USAT, a U.S.-market-specific stablecoin, and has partnered with StablR (Malta) and Quantoz (Netherlands) for MiCA-compliant European offerings. Tether has also claimed 500 million users outside major regulatory frameworks, positioning USDT as the dollar proxy for emerging-market users who lack access to compliant exchanges.
The implication: USDT is becoming an emerging-market instrument while USDC captures regulated, institutional, and DeFi volume in North America and Europe. Two stablecoins, two markets, increasingly separate.
On June 30, 2026, Open Standard announced Open USD (OUSD) — a dollar-pegged stablecoin backed 1:1 by U.S. dollars and Treasuries, governed by an independent board composed of participating partners. The consortium includes BlackRock, Google, Ripple, Visa, Mastercard, Stripe, Coinbase, Solana, Aave, and more than 130 additional firms.
The structural difference from USDC: Open USD passes reserve income through to distribution partners. Under Circle's model, Circle retains the majority of interest earned on reserve assets (primarily short-term Treasuries). Under Open USD's model, partners who mint and distribute the stablecoin receive a share of that yield.
Stripe stated it would make OUSD the default stablecoin for businesses transacting on its platform. Coinbase confirmed OUSD would be available on Base and other chains. The token has not yet launched but is expected to go live in late 2026.
The threat to Circle is direct. If distribution partners can earn revenue from the stablecoin itself, their incentive to promote USDC diminishes. Mizuho's July downgrade specifically cited this dynamic, raising its estimate for Circle's distribution and transaction costs in 2027 to 73% of revenue (from 64%) and cutting its adjusted EBITDA forecast to $699 million from $1.09 billion.
Coinbase and Visa representatives stated they plan to support multiple stablecoins simultaneously, framing Open USD as an additional payments rail rather than a USDC replacement. Whether that distinction holds under commercial pressure remains to be tested.
Morgan Stanley analyst James Faucette downgraded Circle Internet Group to Underweight on August 3, 2026, cutting the price target from $106 to $38. The note cited USDC contraction as exposing reserve income sensitivity and a lower-margin shift toward transaction-based revenue. Morgan Stanley cut its USDC supply assumptions by 33% for 2027 and 44% for 2028, pushing GAAP EPS estimates 3% and 20% below consensus, respectively.
Faucette specifically noted that tokenized money market funds and deposits threaten both USDC balances and take rates. Agentic payments — frequently cited by Circle as a growth vector — were described as "immaterial," with daily volume at $41,900 and an implied average transaction size near $0.24.
The Morgan Stanley downgrade followed Mizuho's July 14 cut. Analyst Dan Dolev lowered Circle to Underperform from Neutral, reducing the price target from $85 to $50 (later revised to $45). Dolev cited Open USD's yield pass-through model as the primary threat to Circle's margin structure.
Circle's stock fell 6% on August 3 following the Morgan Stanley note. Year-to-date, shares have declined approximately 30%. The analyst consensus price target range now spans $38 to $82, according to Benzinga tracking.
Circle's Q1 2026 results illustrated the tension. Revenue reached $694 million, up 20% year-over-year, but below the $715 million analyst consensus. USDC circulating supply hit $77 billion, a 28% year-over-year increase. On-chain transaction volume surged 263% to $21.5 trillion.
Net income fell 15% to $55 million. Operating expenses rose 76% to $242 million, driven by personnel costs post-IPO. Adjusted EBITDA increased 24% to $151 million. Earnings per share of $0.21 beat the $0.19 consensus.
The pattern: volume growth is not translating proportionally into profit growth. Circle's revenue model depends heavily on the spread between the yield on reserve assets (primarily short-term U.S. Treasuries) and the zero yield passed to USDC holders. As competition from yield-bearing stablecoins like Ethena's USDe (now exceeding 4% market share) and the looming Open USD consortium pressure this spread, the margin compression thesis gains support.
Circle's total lifetime USDC transaction volume surpassed $90.8 trillion as of July 7, 2026, a figure that demonstrates utility but does not resolve the monetization question.
The stablecoin market in August 2026 presents a paradox. USDC has achieved a level of transaction volume dominance not seen since USDT's early monopoly, yet the economic value of that dominance is being contested before it can be fully monetized. The Open USD consortium represents the first coordinated attempt by major financial institutions to commoditize the stablecoin issuance layer, shifting value from the issuer to the distributor.
Tether, despite losing volume share and facing regulatory exclusion from Europe, remains profitable at $1.5 billion per quarter and holds more reserve surplus than many mid-sized banks. Its pivot to emerging markets represents a bet that dollar-denominated digital cash is more valuable where traditional banking infrastructure is weakest.
For the broader market, the data suggests stablecoins have crossed a utilization threshold: $1.79 trillion in monthly adjusted volume is comparable to mid-tier national payment systems. The question is no longer whether stablecoins will be used at scale. It is who captures the economics of that usage — issuers, distributors, or the networks they settle on.