Circle’s USD Coin (USDC) achieved transaction volumes, during January and February 2026, that put it ahead of its main competitor, Tether (USDT). This trend marks a turning point where Circle coin leads network activity, even though Tether maintains a stranglehold on stored value, with $184 billion to USDC’s $75 billion. This divergence confirms that USDC has surpassed USDT in “circulation velocity.” The above implies that, structurally, each unit of USDC changes hands more frequently to settle tradespositioning itself as the sector’s working tool, while USDT remains the main store of value asset, as shown by Visa data. However, USDC leads in transactional activity within certain on-chain metrics, especially in Layer 2 networks. This rally in USDC coincides with the rise of financial infrastructure that prioritizes regulatory compliance in the United States and Europe. A key driver of this volume is Basethe network developed by Coinbase, where USDC acts as the native and primary digital asset. This vertical integration favors more frequent circulation of the Circle asset compared to USDT. Structurally, this means that although Tether has more units on the market, USDC has a higher circulation velocity, with each unit being transferred more frequently to settle trades in specific environments.
The chart highlights the overall growth of the stablecoin market, from $140B in early 2024 to $266B in 2026, with USDT maintaining the lead but losing relative share to new competitors such as USDC and other issuers. source: Allium. However, CoinMetrics analysts suggest caution when interpreting these figures. They note that a considerable portion of this volume, approximately 50% in the Base network during January 2026, comes from protocols of decentralized finance (DeFi), such as liquidity pools in Aerodrome, DEX (decentralized exchange) or activities in Morpho, which is a decentralized lending and credit infrastructure. These flows, which include flash loans and automated rebalancing, generate large numbers that do not necessarily translate into commercial adoption or payments in the real economy.
Much of the recent volume is tied to automated DeFi infrastructure. For the trend to be sustainable in the long term, a greater shift toward real-world payments and settlements would be required.
CoinMetrics Report.
The chart illustrates how capital in USDC does not stop at fixed purchases, but rather circulates in a constant rebalancing cycle. Source: CoinMetrics. To understand Aerodrome’s behavior, it is key to note that its volume does not come primarily from conventional purchases and sales. By using a concentrated liquidity model, the system forces investors to constantly move their capital into specific price ranges to continue earning rewards. Much of the observed flow responds, therefore, to technical asset management where users withdraw and redeposit funds en masse to readjust their positions or migrate towards the most profitable funds at the close of each cycle. Consequently, these multi-million dollar figures reflect more of a strategic inventory rotation than a commercial or organic use of the digital dollar. If anything, the rivalry between USDT and USDC persists and underscores a strategic bifurcation in the industry. While Tether relies on massive liquidity and deep global adoption in emerging markets, Circle relies on transparency, audited reserves and efficiency for institutional use. As reported by BitcoinDynamic, Tether’s hegemony is especially visible in Latin America. In environments where national currencies are volatile and banking systems exclude large parts of the population, USDT offers stability that local governments do not guarantee. The outcome of this competition will determine whether stablecoins manage to transcend the digital asset ecosystem to become standardized components of international trade.
