USDC’s Growing Influence in DeFi and Crypto Markets
Estimated reading time: 4 minutes
- USDC has a market capitalization of approximately $59 billion, making it the second-largest stablecoin.
- The stablecoin sector represents over 90% of the total market share with USDT and USDC combined.
- USDC has seen increased adoption in DeFi, surpassing USDT in this area despite lower overall market capitalization.
- Institutional partnerships enhance USDC’s reputation and functional use in traditional finance.
- Circle, the issuer of USDC, is preparing for an IPO while maintaining a strong emphasis on transparency and compliance.
As of early June 2025, USD Coin (USDC) ranks as a notable entity in the stablecoin and decentralized finance (DeFi) sectors. With a market capitalization approaching $59 billion, USDC is the second-largest stablecoin, holding approximately 27% of the market[1]. This growth is significant when compared to Tether (USDT), which has a market cap of about $144 billion, representing over 63% of the total stablecoin market[1]. Together, USDT and USDC account for more than 90% of the combined stablecoin market share[1].
The dominance of these two stablecoins has sparked discussions about centralization in a space that initially focused on decentralization. Although USDC trails behind USDT in total market capitalization, it has made considerable strides in DeFi, where it has surpassed USDT in adoption[1]. Major platforms such as Aave, Compound, and Uniswap have integrated USDC fully into their services, indicating its growing acceptance among developers and users[1].
The wider cryptocurrency market has experienced growth as well, with total market capitalization surpassing $3.5 trillion in late May 2025[2]. The stablecoin sector has seen robust development, with supply figures reaching $233.47 billion by early April, representing a 9.61% increase since the beginning of the year[2]. However, USDC’s market share on decentralized exchanges (DEXs) has decreased from over 40% to approximately 30% in the past year[2]. This decline is attributed to increased competition from newer entrants, such as Ethena’s synthetic USDe[2].
Institutional interest in USDC is increasing. Circle, the organization behind USDC, has developed partnerships with major financial institutions, including Cross River Bank and Fidelity, which enhances the stablecoin’s reputation and applicability in traditional finance[1]. As institutions adopt USDC for treasury management, cross-border transactions, and as collateral in DeFi protocols, its utility extends beyond typical cryptocurrency functions[1]. Moreover, USDC’s compatibility with major payment systems like Visa facilitates transactions between USDC and traditional fiat currencies[1].
USDC is distinguished by its emphasis on transparency and regulatory compliance. Circle ensures full reserve backing for USDC and conducts regular audits to maintain trust among users and investors[1]. In light of increasing regulatory scrutiny of digital assets, these initiatives position USDC favorably. Circle is also preparing for an initial public offering (IPO) under the ticker “CRCL” on the New York Stock Exchange[1]. Despite reporting a 42% decline in net income, Circle is aiming for a valuation of $5 billion, anticipating the continued growth of the stablecoin market[1].
While USDC has not yet eclipsed USDT in market capitalization, its strategic role in DeFi, solid institutional collaborations, and focus on regulatory compliance suggest a trend of continued expansion in the digital asset landscape.
- AInvest, June 2025, “Stablecoin Market Surges 9.61% Q1 2025: Dominated by USDT & USDC,” https://www.ainvest.com/news/stablecoin-market-surges-9-61-q1-2025-dominated-usdt-usdc-2504/.
- IMF Connect, May 2025, “Crypto Assets Monitor,” https://www.imfconnect.org/content/dam/imf/News%20and%20Generic%20Content/GMM/Special%20Features/Crypto%20Assets%20Monitor.pdf.