Is Merchant Preference the Decisive Factor in Tether’s Rise Over USDC on BitPay?

The dramatic shift in BitPay’s stablecoin transaction landscape has been propelled by a growing preference among merchants and customers for Tether’s USDT. In early 2025, USDT’s transaction share surged to 43%, up from just 13% in January 2024, while USDC’s percentage of transactions dropped from 85% to 56% over the same period.

BitPay’s chief revenue officer, Bill Zielke, attributes this reversal to a clear swing in existing merchants’ and users’ preference for USDT, citing its transactional efficiency and widespread familiarity. This trend has persisted despite Circle’s regulatory advantages and public market debut, suggesting that practical merchant needs outweigh regulatory positioning.

The platform’s expansion in the United States has further exposed a diverse user base to USDT’s benefits, including faster settlement times and broad exchange support, reinforcing its appeal among merchants seeking reliable, liquid payment options.

Regulatory Compliance Alone Fails to Secure Market Leadership

Circle’s USDC has made important progress toward regulatory compliance, becoming the first global stablecoin issuer to receive approval under the EU’s Markets in Crypto-Assets Regulation (MiCA) in July 2024. This was expected to enhance USDC’s credibility and adoption, particularly among institutional users and within regulated markets.

Despite these advantages, USDT’s dominance in payment volume and its rapid transaction share growth on BitPay highlight that regulatory approval is not the sole determinant of success in the stablecoin payments sector. Tether’s decision to reject MiCA compliance and forgo a public listing has not hindered its adoption among merchants.

The market’s response suggests that usability, liquidity, and familiarity with USDT continue to outweigh the perceived benefits of regulatory compliance, at least within the current BitPay merchant ecosystem.

Did you know?
Tether’s USDT, launched in 2014, was the first stablecoin to achieve widespread adoption for crypto payments, setting the stage for today’s competitive stablecoin landscape. Its early focus on liquidity and cross-platform compatibility helped establish the precedent for stablecoin utility in global commerce.

Payment Volume Surges Reflect Merchant Shift to USDT

While transaction counts remain a key metric, payment volume offers a clearer picture of merchant priorities. By March 2025, USDT began to lead in payment volume, eventually exceeding 70% of the stablecoin volume processed by BitPay.

This surge in volume indicates that larger, high-value transactions are increasingly being settled in USDT, further cementing its status as the preferred stablecoin for merchants on the platform. The trend underscores a shift in not just the number of transactions, but their economic significance.

BitPay’s data confirms that the overall increase in stablecoin transactions is accompanied by a decisive swing among both new and existing merchants toward USDT, reflecting a broader change in market sentiment.

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Market Capitalization Growth Contrasts with Transaction Trends

Despite losing ground in transaction share and payment volume on BitPay, USDC has experienced robust growth in market capitalization, surging 88% over the past year from $33 billion to $61.7 billion. In contrast, USDT’s market cap rose by 40% in the same period, from $112.5 billion to $158.3 billion.

Year-to-date, USDC’s market cap has grown 41%, compared to USDT’s 15.5% increase. This divergence highlights the complexity of stablecoin competition: while market cap signals investor confidence and institutional adoption, transaction trends on payment platforms like BitPay reveal merchant and consumer behavior in real-world commerce.

The evolving landscape suggests that market cap growth does not always translate to payment platform dominance, especially when merchant preference is in flux.

USDT’s Familiarity and Simplicity Drive Merchant Adoption

Tether’s USDT benefits from broad acceptance, deep liquidity, and a straightforward operational model, making it an attractive option for merchants seeking stable, efficient payment solutions. Its widespread support across exchanges and wallets further enhances its utility in everyday transactions.

BitPay’s expansion in key markets, particularly the United States, has amplified USDT’s visibility and appeal among merchants and consumers alike. The simplicity and reliability of USDT transactions have proven decisive for many businesses, outweighing the regulatory and institutional advantages held by USDC.