Tether (USDT), the leading stablecoin, is seeing aggressive growth across alternative blockchains during the current market cycle. While USDT’s primary activity centers around Ethereum and TRON, significant expansion has occurred on emerging platforms like Toncoin and Celo.
This expansion positions Tether as a critical player in decentralized finance (DeFi) and simple payments on new chains. In September, the total supply of USDT reached 119.34 billion tokens, with an additional 1 billion tokens minted in the past month alone. As USDT increases its presence on alternative chains, its supply on Celo grew by over 68%, approaching $300 million. Meanwhile, Toncoin saw over $668 million in inflows, with an anticipated rise to over $700 million. USDT’s activity spans decentralized exchanges (DEXs), centralized exchanges, and daily payment use cases across these chains.
Celo expanded its USDT supply for trading and transfers. | Source: Artemis
USDC takes a conservative approach
While Tether continues diversifying its platform, Circle’s USDC has focused on compliance and maintaining activity on the Base blockchain. USDC’s usage has remained stable, particularly in following European Union regulations. However, USDC’s market share in private wallets has slightly declined compared to USDT. USDT holds 69% of its supply in private wallets, with a smaller portion, around 22.7%, deposited in centralized finance (CeFi) hubs like exchanges and yield platforms.
Despite USDC’s conservative approach, stablecoins have seen significant growth in 2024, especially with the increasing adoption of crypto-collateralized stablecoins. The total stablecoin supply reached between 164 billion and 169 billion, a recovery close to the market peak before the FTX collapse. Notable expansion has been observed on L2 chains like Base and Optimism, and the most significant growth occurred on Celo.
USDT’s varied use cases
USDT’s use cases differ depending on the blockchain. On Celo, the stablecoin is primarily used for transfers to and from centralized exchanges, accounting for $276.6 million of activity as of September. About $14 million, a smaller portion, went to decentralized finance (DeFi) applications, with Uniswap leading the way. On Toncoin, USDT plays a more significant role in gas fees, peer-to-peer payments, and the Telegram advertising economy.
The adoption of USDT in emerging markets continues to grow, providing a convenient solution for payments and transfers outside the strict regulatory environments of the United States and the European Union. USDT is also widely used within Telegram and the Toncoin wallet, enabling zero-fee transfers and message-based payments. This versatility is helping USDT become a go-to asset in tap-to-earn communities and decentralized applications.
Celo prepares for L2 transition
Celo’s recent shift toward becoming an Ethereum Layer 2 (L2) solution is another critical factor driving USDT’s growth. The platform’s transition is expected to facilitate the inflow of stablecoins like USDT from Ethereum. The Celo team has successfully launched the Alfajores testnet, now known as Celo L2, producing blocks for the past 12 hours. Although the complete transition has no fixed deadline, this move will likely encourage more stablecoin activity on Celo, especially with easier asset transfers from Ethereum.
The growth of stablecoins, led by Tether’s aggressive expansion, signals the increasing importance of stable assets across blockchains, particularly in emerging markets and decentralized finance applications.