Stablecoin Power Rankings
Tether made $10 billion in profit through the first three quarters of 2025—more than Bank of America. Coinbase earns roughly $1.5 billion annually just from its revenue-sharing deal with Circle. Meanwhile, the combined market share of USDT and USDC has slipped from 88% to 82%, as a new generation of challengers chips away at the duopoly. Welcome to the most profitable corner of crypto that most people don't fully understand.
The $311 Billion Market and Its Two Kings
The stablecoin market hit $311 billion in total capitalization by late 2025, with transaction volumes reaching a record $33 trillion for the year. That's not a typo—stablecoins now rival Visa and Mastercard in transaction throughput, processing more value than many traditional payment networks.
Two issuers dominate this market with an iron grip:
Tether (USDT): $183 billion market cap, 59.4% market share, controlling over 82.5% of global stablecoin trading volume. Tether closed Q3 2025 with daily trading volumes between $40-200 billion—roughly 5x larger than USDC.
Circle (USDC): $73.4 billion market cap (up from $53.3B in January), 25.5% market share. USDC dominates institutional DeFi and serves as the preferred stablecoin for U.S. Treasury tokenized projects and corporate treasuries.
Together, these two control approximately 85% of the market. But that number was 88% at the start of 2025, and the erosion is accelerating.
Tether: The $10 Billion Profit Machine
Tether's financial performance in 2025 reads like a Wall Street bank's annual report. Through Q3 2025, the company reported $10 billion in net profit—surpassing Bank of America and approaching Goldman Sachs territory.
The quarterly breakdown reveals the scale:
- Q1 2025: $800 million
- Q2 2025: $4.9 billion (including $3.1 billion operational, $1.8 billion from BTC/gold appreciation)
- Q3 2025: $4.3 billion, primarily from Treasury interest
The profit engine is surprisingly simple: Tether holds approximately $135 billion in U.S. Treasuries backing USDT reserves—making it the 17th largest holder of U.S. government debt globally, surpassing South Korea. At current interest rates, those reserves generate billions in risk-free income while USDT holders receive zero yield.
Beyond Treasuries, Tether maintains $12.9 billion in gold and $9.9 billion in Bitcoin, representing about 13% of total reserves. For 2024, unrealized gains on these holdings contributed approximately $5 billion to profits.
The company's excess reserves sit at $6.8 billion—a buffer larger than the entire market cap of most stablecoin competitors.
The Circle-Coinbase Alliance: A $60 Billion Partnership
While Tether operates as a standalone profit machine, Circle's economics involve a complex revenue-sharing arrangement with Coinbase that has become one of the most valuable partnerships in crypto.
The structure works as follows:
- Coinbase receives 100% of interest income from USDC held directly on its platform
- For USDC held off-platform, Coinbase and Circle split revenue 50/50
- The agreement renews every three years, with the next review due in 2026
In Q1 2025 alone, Coinbase earned roughly $300 million in distribution payments from Circle—more than Circle's total net revenue of $230 million for the quarter. JPMorgan estimates that Coinbase held $13 billion in USDC balances on-platform at quarter end, generating $125 million in revenue at 20-25% margins. Off-platform income added another $170 million at nearly 100% margin.
The projections are staggering. By end of 2025, total USDC reserve income could reach $2.44 billion, with $1.5 billion flowing to Coinbase and $940 million to Circle. By 2029, those figures could climb to $9.15 billion total, with $5.99 billion to Coinbase and $3.16 billion to Circle.
JPMorgan values the total Circle-related economics to Coinbase shareholders at $55-60 billion—suggesting markets significantly underestimate this relationship's strategic importance.
Coinbase's share of USDC supply has grown steadily: 5% in 2022, 12% in 2023, 20% in 2024, reaching 22% ($12 billion) by Q1 2025. The exchange earned approximately 56% of USDC reserve revenue in 2024, making it a major distribution cost for Circle but a massive profit center for Coinbase.
The Challengers: Eating Into the Duopoly
The 6-percentage-point decline in USDT/USDC combined market share masks significant shifts in the competitive landscape.
Ethena USDe: The Synthetic Dollar Disruption
Ethena's USDe exploded from below $6 billion to over $14 billion market cap in 2025, capturing nearly 5% of the market. Unlike traditional stablecoins backed by dollars and Treasuries, USDe maintains its peg through delta-hedging strategies—staking assets like ETH while holding offsetting short positions in perpetual futures markets.
The approach carries risk. USDe's market cap surged to nearly $15 billion before an early October flash crash pulled it back to around $6.5 billion. Regulatory scrutiny intensified when Ethena Labs pulled out of the German market in April over "serious deficiencies" in compliance.
To address regulatory concerns, Ethena launched USDtb as a GENIUS Act-compliant alternative, backing it with tokenized money market funds rather than derivatives strategies.
PayPal PYUSD: The TradFi Bridge
PayPal USD represents traditional finance's most serious stablecoin bet. PYUSD hit $3.6 billion market cap by December 2025, working natively within PayPal's ecosystem of 430 million consumers and 36 million merchants.
The stablecoin maintains full reserve backing through U.S. dollar deposits and short-dated Treasury bills, with regular third-party attestations. Recent integrations include YouTube allowing U.S. creators to receive earnings in PYUSD—tapping into the creator economy's 3+ million U.S. channels.
PYUSD's advantage isn't crypto-native adoption but distribution through existing payment rails. Every PayPal integration becomes a potential stablecoin onramp.
Ripple RLUSD: The Regulatory-First Approach
Ripple USD launched in December 2024 with NYDFS approval and has grown from $53 million to $1.31 billion market cap through 2025. The Bank of New York Mellon now provides primary custody for RLUSD reserves.
Ripple is expanding RLUSD to Layer 2 networks including Optimism, Base, Ink, and Unichain through a Wormhole partnership. The regulatory-first strategy positions RLUSD well for the post-GENIUS Act landscape.
Sky USDS: The DeFi Native
Sky's USDS (formerly MakerDAO's evolution) grew to $4.43 billion market cap from $3.7 billion at year start. Combined with un-upgraded DAI, total market cap reaches approximately $7.5 billion.
Unlike fiat-backed stablecoins, USDS uses cryptocurrency collateralization—making it more native to DeFi but potentially non-compliant with emerging regulations requiring reserve backing.
First Digital FDUSD: The Binance Partner
FDUSD maintains a $1.45 billion market cap (down from $2.1 billion) with reserves held by First Digital Trust, a licensed Hong Kong trust company. Deep Binance Pay integration and recent expansion to TON—plugging into Telegram's 1+ billion monthly active users—keeps FDUSD relevant despite market cap declines.
The Regulatory Reshaping: GENIUS Act and MiCA
The U.S. GENIUS Act passage in mid-2025 and full MiCA implementation in Europe are fundamentally reshaping the competitive landscape.
Key implications:
- Stablecoins must meet reserve backing requirements
- Synthetic/algorithmic approaches face regulatory headwinds
- Ethena USDe and Sky DAI/USDS may not comply with new U.S. requirements
- PYUSD and RLUSD are positioned as regulatory-compliant alternatives
Market projections suggest stablecoin market cap could breach $400 billion in 2026, with transaction volumes rivaling Visa and Mastercard combined. The winners will be issuers that combine regulatory compliance with distribution reach.
The Economics That Matter
Understanding stablecoin issuer economics requires looking beyond market cap:
Revenue Model: Issuers earn yield on reserves while holders receive nothing. At 5% Treasury yields, a $100 billion stablecoin generates $5 billion in annual revenue with minimal operational costs.
Distribution Costs: Circle's deal with Coinbase shows how expensive distribution can be—over half of reserve revenue going to a single partner.
Regulatory Moats: NYDFS approval, MiCA compliance, and banking partnerships create barriers to entry that pure crypto projects struggle to overcome.
Network Effects: USDT's dominance in trading pairs and USDC's institutional adoption create self-reinforcing advantages.
2026 Outlook: What Changes
Several trends will shape the stablecoin market in 2026:
Regulatory Consolidation: Compliant issuers (Circle, Ripple, PayPal) gain share while non-compliant alternatives face restricted access to U.S. and European markets.
Yield Pressure: Users increasingly question why issuers capture 100% of reserve yield. Yield-bearing stablecoins and revenue-sharing models will proliferate.
TradFi Entry: Major banks and payment networks will launch stablecoin products, fragmenting the market but expanding total addressable market.
Multichain Expansion: Stablecoins native to specific chains (Base, Solana, TON) will capture ecosystem-specific use cases.
The stablecoin market's next chapter won't be written by which issuer has the largest reserves, but by which can navigate regulation, distribution, and yield economics most effectively.
Conclusion: Follow the Money
The stablecoin market represents crypto's most successful product-market fit—digital dollars that move faster and cheaper than traditional alternatives. The issuers capturing this market are generating profits that rival major banks with a fraction of the overhead.
Tether's $10+ billion annual profit demonstrates what's possible when you control reserve interest on $180+ billion in circulation. Coinbase's $1.5 billion in Circle-related revenue shows how distribution can be as valuable as issuance. And the challengers eating into the duopoly prove that even dominant market positions aren't permanent.
For investors, developers, and users, understanding who makes money from stablecoins—and how—is essential to understanding where crypto's most important infrastructure is heading.
This analysis is for informational purposes only and does not constitute investment advice. Always conduct your own research before making investment decisions.