Stablecoin competition enters deep waters: Why does Circle assert that "not all companies can succeed in issuing"?

As the regulatory framework becomes clearer by 2026, the global stablecoin market is entering a new stage of competition.

The passage of the U.S. GENIUS Act and the implementation of the EU’s MiCA regulations have set higher entry barriers for stablecoin issuance. At this critical turning point, Circle CEO Jeremy Allaire explicitly stated in its 2026 strategic report: “Issuing stablecoins is a privilege, and redemption is a right.”

Market Segmentation

The current stablecoin market is showing a clear polarization. Although the total global stablecoin market capitalization grew from approximately $205 billion in 2025 to over $300 billion, market concentration continues to increase.

Data shows that among over 300 stablecoin projects, only 14 have a market cap exceeding $1 billion, and about 95% of projects have never achieved true success. This segmentation indicates that the market is transitioning from rapid growth to mature competition.

As one of the largest regulated digital dollars globally, USDC’s circulation volume grew by 108% year-over-year in 2025, demonstrating strong growth momentum among leading projects. In just the third quarter of 2025, on-chain USDC trading volume increased by 680% year-over-year, reaching nearly $10 trillion.

Competition Barriers

By 2026, the barriers to entering the stablecoin industry have significantly increased. Technical capability is merely a basic prerequisite; the real threshold lies in the complex ecosystem of compliance, operations, and trust-building.

The passage of the U.S. GENIUS Act established a federal regulatory framework for “permitted stablecoins” for the first time. The law requires stablecoins to be backed by 100% liquid assets and mandates standardized monthly disclosures.

Globally, the EU’s MiCA framework regulates stablecoins as “electronic money tokens,” while the UK has established a dual supervision model for payment stablecoins jointly overseen by the Financial Conduct Authority and the Bank of England.

Circle’s Full-Stack Strategy

Circle is building a comprehensive three-layer internet financial platform, from foundational infrastructure to application layer, creating a strong ecosystem barrier.

Arc, as an economic operating system, is at the core of Circle’s strategy. This underlying blockchain infrastructure aims to become the internet’s economic operating system, integrating tamper-proof data, high-performance smart contract execution, global compliance readiness, and neutral governance.

On the digital asset layer, USDC, EURC, and USYC have become central to Circle’s product matrix. As of January 27, 2026, the assets under management for USYC reached $1.6 billion.

The application layer includes products like Circle Payment Network (CPN) and StableFX, enabling institutions to conduct programmable, compliant, and auditable payments at internet speed.

High Barriers to Issuing Stablecoins

Creating stablecoins is technically relatively simple—essentially writing and deploying code on a blockchain. However, operating a trusted, regulated stablecoin is a completely different matter.

This requires 24/7 real-time reserve management, liquidity support across market cycles, compliance reporting across multiple jurisdictions, and transparent redemption mechanisms.

The stablecoin industry has witnessed serious consequences from operational errors in recent years. Media reports have highlighted incidents such as issuers accidentally minting tokens worth $300 trillion due to operational mistakes, and well-known stablecoins briefly losing their peg during market turbulence.

Collaboration Over Competition

For most enterprises, a smarter strategy is to collaborate with established stablecoin issuers rather than issuing their own. By integrating mature stablecoins like USDC, companies can achieve near-instant settlement, global coverage, and interoperability across dozens of blockchains without bearing the complexities of reserve management and regulation.

Circle’s deep integration with the global banking system provides a solid foundation for its stablecoins. The company has established partnerships with global financial institutions such as Standard Chartered and Deutsche Bank. This deep banking integration is crucial for maintaining stablecoin operations across market cycles.

Especially under the EU’s MiCA framework, USDC and EURC are classified as electronic money tokens, positioning them nearly on equal footing with well-known electronic and mobile payment frameworks.

Summary

As a leading global digital asset trading platform, Gate Research Institute noted in the “2025 Cryptocurrency Market Review and 2026 Outlook” report that the total cryptocurrency market cap in 2025 showed a clear “decline—rebound—further decline” trend.

Regarding stablecoins, Gate observed that the crypto payment sector continues to expand supported by increased stablecoin settlement efficiency and growing cross-border consumption demands, accelerating stablecoin penetration into real-world payment scenarios.

It is recommended to focus on leading compliant stablecoins, especially those with clear regulatory status, sufficient reserve proof, and strong banking partnerships.

For investors seeking stablecoin exposure, allocating a portion of their portfolio to regulated stablecoins like USDC can serve as a “stabilizer” within their digital asset holdings. Additionally, as stablecoins’ applications in payments, settlement, and DeFi expand, related ecosystem projects and infrastructure are also worth attention.

Investors can easily access the USDC market through the Gate platform, leveraging its efficient and secure trading environment to participate in the stablecoin ecosystem. As stablecoins accelerate integration into mainstream finance, platforms capable of providing reliable stablecoin services will gain more market opportunities.