Hadick: Banks and Fintechs Will Break USDT‑USDC Duopoly

Rob Hadick, general partner at venture firm Dragonfly, told investors that banks, fintech firms and new issuers will challenge the USDT–USDC duopoly by winning share in payments, remittances and compliance rails: ‘We will not be in a duopoly years from now.’

He said the next phase of stablecoin growth will be driven more by payments infrastructure, distribution and real-world financial flows than by who issues coins or how reserves are managed.

Hadick highlighted several sources of competition: banks embedding stablecoins into customer products, fintech platforms adding token rails to services, crypto-native issuers designing more flexible tokens, and potential consortium efforts by large payments companies.

Challengers may not replace USDT or USDC in market capitalization immediately, he said, but could gain ground through higher transaction volumes, merchant adoption, regional dominance or specific business flows. He pointed to remittance corridors such as the U.S. to India and the U.S. to Mexico as areas where superior infrastructure could shift use away from incumbent tokens in some emerging markets.

Hadick listed vulnerabilities for incumbents. He noted regulatory pressure on Tether in certain jurisdictions and described debate over yield sharing and economic participation as a point of friction with banks. He also identified user and business experience gaps: many find stablecoins hard to access, move, reconcile and integrate into existing workflows.

New issuers, he said, can design tokens with different incentive alignment and technical flexibility. He cited Paxos and Agora as examples of firms building composable stablecoin solutions that can support full collateralization, cross-chain use and commercial customization for specific financial uses such as savings, collateral mobility and foreign-exchange settlement.

Hadick argued that neutral, non-bank issuers will remain important because closed platforms may struggle to transact with one another without a neutral party in the middle. He described Circle, Tether, Paxos and Agora as expanding beyond token issuance into payments, fintech infrastructure and global financial services.

He distinguished government-issued stablecoins from central bank digital currencies, saying they are separate products with different trade-offs on trust, privacy and programmability.

Hadick cautioned that building liquidity and distribution is difficult and that many stablecoin projects will fail. He estimated the market is roughly 5% developed and said surviving tokens will need distribution, trust, liquidity, regulatory clarity and a clear commercial purpose.