Stablecoins split roles: USDT for payments, USDC for DeFi

On-chain data show Tether’s USDT has become the primary stablecoin for commercial payments while Circle’s USDC is the leading settlement token for on-chain trading and decentralized finance. Euro-pegged stablecoins rose in value before the EU’s Markets in Crypto-Assets regulation (MiCA) took effect on July 1, 2026.

USDT processed about $95 billion in identified commercial payments in the first half of 2026. USDC recorded transfer volumes measured in the trillions of dollars monthly on networks including Ethereum and Base. USDT supply is split roughly evenly between Tron and Ethereum, while USDC activity is concentrated on Ethereum.

On-chain flows show payments firms, merchants and remittance services used USDT on rails that support high-volume off-chain and cross-border transfers. Exchanges, automated market makers and lending protocols used USDC on Ethereum and Layer 2 networks for settlement and smart-contract interactions.

Euro-denominated stablecoins grew in the year leading up to MiCA. The combined market capitalization of eight actively traded euro tokens rose 128% to about $674 million, and trading volume increased roughly 43% over the same period. Euro-pegged tokens account for about 0.22% of the roughly $315 billion dollar-backed stablecoin market.

MiCA requires reserve transparency and includes strict reserve rules and limits on earning yield from reserve assets. Industry groups argued those provisions increase safety while raising costs and complexity for issuers. Other stakeholders described the framework as providing regulatory certainty for issuers operating in the bloc.

A major publicly traded Bitcoin holder sold 3,588 BTC, about $216 million, to fund preferred stock dividends under a revised capital framework that permits Bitcoin sales for dividend payments. The company’s Bitcoin holdings fell to 843,775 BTC and cash reserves remained around $2.55 billion. Analysts at Bernstein wrote the sale aligns with the firm’s new financial framework and is unlikely to signal an end to its longer-term Bitcoin accumulation strategy while renewing debate about the company’s previous “never sell” stance.

Vanguard posted a job on July 6 for a head of digital assets to oversee tokenization, stablecoins, custody, blockchain infrastructure and engagement with regulators. The listing details responsibilities tied to tokenized products. Several large asset managers have expanded tokenized fund offerings to meet institutional demand for blockchain-based products.

Stablecoins are digital tokens pegged to fiat currencies and backed by reserves such as cash and short-term government securities. They are used for payments, trade settlement and as liquidity in decentralized finance. MiCA sets operational standards for stablecoin issuers in the EU aimed at investor protection and market stability.