Circle vs Tether 🥊

Circle's penchant for compliance is key to growth

March 03, 2025

Hey all, Liam here. 

When it comes to dominance in the stablecoin market Circle has long played the tortoise to Tether’s hare.

Now Circle’s go-slow-and-comply approach has left it well poised for growth as the US Senate considers potential landmark stablecoin legislation — and its rival seems to be fuming.

As DL News reported, Circle’s compliance with regulation in Europe and the US will make it relatively easy for the stablecoin issuer to adapt to potential new landmark legislation. 

In its quest to instill much needed clarity to the stablecoin market, the GENIUS Act would bring major issuers under federal supervision. 

The bill will also require independent audits of their reserves to ensure they are adequately backing up their tokens with cash or cash equivalent assets.

“All companies that issue dollar stablecoins — whether they are startups or based outside the US — should have the opportunity to register in the United States and compete on a level playing field,” Dante Disparte, Circle’s chief strategy officer and head of global policy, told DL News.

Momentum for stablecoins is rising.

Last week, DL News reported that Chris Colson, a payments researcher at the Federal Reserve Bank of Atlanta, is convinced stablecoins can become integrated into the payments infrastructure as an innovative new tool.

But it’s going to take time, he told me.

This is no problem with Circle. 

Backed by Goldman Sachs and led by Jeremy Allaire, the company has been audited by Deloitte since 2022 and, based in New York, it already complies with a slew of state and federal financial regs.

In contrast, Tether shunned compliance with MiCA, the European Union’s new crypto rules, even though this meant exchanges would delist its stablecoin, USDT.  

Opting to remain offshore, the company is moving its headquarters to El Salvador. 

To be sure, Tether’s go-fast approach has enabled the 11-year-old venture to dominate the market; USDT’s market value of $142 billion is more than two-and-half times greater than that of Circle’s stablecoin. 

With the US market now in play, pressure is rising. In a lengthy post on X last week, Tether CEO Paolo Ardoino lashed out at unnamed rivals.

“I’ll leave it to you to define a competitor trying to use lawfare to kill an opponent, instead of focusing on better products,” he wrote. “Tether won’t stand still and we won’t let these attacks succeed.”

It’s unclear what specific instances of “lawfare” or “attacks” Ardoino was referring to. 

ICYMI

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In a memorandum, the SEC explained that memecoins do not generate yield or promise holders future income.

As a result, they do not meet the definition of a security or investment contract under federal securities laws.

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Ari Redbord, TRM Labs

DL News is an independent news organisation that provides original, in-depth reporting on the largely misunderstood world of cryptocurrency and decentralised finance. From original stories to investigations, our journalism is accurate, honest and responsible.

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