Crypto Traders Appear To Be Shifting From USDT To USDC As US Prepares to Enact Stablecoin Law

Blockchain data from Glassnode showed that on-chain value transferred using USDT dropped 20% in the last 24 hours, while USDC’s jumped by nearly 40%.

The stablecoin market showed signs of rotation on Friday ahead of the expected signing of the GENIUS Act, the first major U.S. crypto legislation. Traders appeared to be shifting away from Tether’s USDT (USDT) and toward Circle’s USDC (USDC). 

According to DeFiLlama data, total stablecoin market capitalization rose 1.3% in the past week amid ‘Crypto Week’ in Washington, which has brought renewed optimism around regulatory clarity.

Circle Internet’s (CRCL), issuer of the $62 billion USDC stablecoin, was up more than 2% in pre-market trade, extending this week’s 5% rally. On Stocktwits, retail sentiment around Circle’s stock was in ‘bullish’ territory, but there wasn’t any noticeable uptick in chatter.

Blockchain data from Glassnode showed a sharp divergence in flows. On-chain value transferred using USDT dropped 20% in the last 24 hours, while USDC’s jumped by nearly 40%. Meanwhile, DeFiLlama data showed USDC’s market cap rose 1.5% over the past day and 2.5% over the week. Tether's market cap dipped 0.35% daily but was up 0.92% weekly.

The uptick in USDC usage suggests growing investor preference for U.S.-regulated or GENIUS-compliant stablecoins. The legislation doesn’t ban Tether outright, but gives the issuer 18 to 36 months to meet compliance requirements and leaves the door open for new players like Ripple’s RLUSD (RLUSD) to gain ground.

Ripple’s native token XRP (XRP) hit an all-time high after the GENIUS Act cleared the House of Representatives on Thursday.

Tether, which made $13.7 billion last year largely through interest on U.S. Treasuries and crypto gains, recently moved its headquarters to El Salvador and secured a local license. Whether that qualifies under GENIUS will depend on how the Trump administration views El Salvador’s oversight.

In 2021, Tether settled with the New York Attorney General over a lack of disclosure regarding its reserves. It now releases quarterly attestations, though it still lacks a full public audit.

While Tether has pulled out of the European Union, it could retain U.S. market access if El Salvador is deemed sufficiently compliant. 

The GENIUS Act – short for Guiding and Establishing National Innovation for U.S. Stablecoins – is scheduled to be signed into law Friday afternoon by President Donald Trump. It establishes a formal framework for stablecoin issuers, most of whom have operated without U.S. regulatory clarity until now.

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