Not all stablecoins are equal β some dominate the market, while others serve niche purposes. Today, a handful of stablecoins account for over 90% of global stablecoin circulation and play a critical role in trading, payments, and DeFi.
Hereβs a breakdown of the most popular stablecoins, their key features, and why theyβre widely adopted.
Tether (USDT)
Strengths:
β Massive liquidity and adoption.
β Widely integrated in exchanges, DeFi, and remittances.
Weaknesses:
β Past concerns over reserve transparency.
β Regulatory scrutiny in U.S. and EU.
USD Coin (USDC)
Launched: 2018 (by Circle, regulated in U.S.)
Type: Fiat-backed (USD)
Market Cap: ~$35B
Use Case: Payments, DeFi, regulated finance.
Strengths:
β Strong compliance and regular audits.
β Supported by Visa, Mastercard, PayPal, and Stripe.
Weaknesses:
β Centralized (issuer-controlled).
β Lost peg briefly during 2023 banking crisis (Silicon Valley Bank collapse).
DAI
Launched: 2017 (by MakerDAO)
Type: Crypto-backed (ETH, USDC, others)
Market Cap: ~$5B
Use Case: DeFi lending, decentralized payments.
Strengths:
β Decentralized governance via MakerDAO.
β On-chain collateral, transparent.
Weaknesses:
β Over-collateralization makes it less efficient.
β Still partly reliant on centralized collateral like USDC.
Binance USD (BUSD) β Declining
Launched: 2019 (by Paxos & Binance)
Type: Fiat-backed (USD)
Market Cap: Peaked at $23B, now < $100M (phased out).
Use Case: Previously major trading pair on Binance.
Strengths:
β Once highly liquid.
Weaknesses:
β Regulatory crackdown ended its growth.
β Paxos stopped issuing new BUSD in 2023.
PAX Gold (PAXG)
Launched: 2019 (by Paxos)
Type: Asset-backed (Gold)
Market Cap: ~$500M
Use Case: Digital gold ownership, inflation hedge.
Strengths:
β Pegged to physical gold, redeemable.
β Diversifies beyond fiat-backed coins.
Weaknesses:
β Low liquidity compared to USDT/USDC.
β Custodian risk.
TrueUSD (TUSD)
Strengths:
β Regular attestations.
β Available across multiple blockchains.
Weaknesses:
β Limited adoption compared to USDC/USDT.
Honorable Mentions
FRAX: Partially algorithmic + collateralized hybrid stablecoin.
GUSD (Gemini Dollar): U.S. regulated but low adoption.
PYUSD (PayPal USD): New player in digital payments.
Comparison Table of Top Stablecoins
| Stablecoin | Type | Market Cap | Key Strength | Weakness |
|---|
| USDT | Fiat-backed | $110B+ | Most liquid, global adoption | Transparency concerns |
| USDC | Fiat-backed | ~$35B | Regulated, audited | Centralized, banking risk |
| DAI | Crypto-backed | ~$5B | Decentralized, transparent | Over-collateralized |
| BUSD | Fiat-backed | < $100M | Once major exchange coin | Regulatory shutdown |
| PAXG | Asset-backed | ~$500M | Gold-backed diversification | Low liquidity |
| TUSD | Fiat-backed | ~$500M | Regular attestations | Limited adoption |
Future Outlook
USDT will likely remain the dominant trading stablecoin.
USDC is positioned for regulated finance and mainstream payments.
DAI will stay core to DeFi, especially with MakerDAO upgrades.
Asset-backed stablecoins (like PAXG) will grow as tokenization expands.
New entrants (PYUSD, CBDCs) may shake up competition.
Summary
The most popular stablecoins today are:
USDT (liquidity leader),
USDC (regulated payments),
DAI (DeFi decentralized option),
PAXG (gold-backed diversification).
Each has strengths and trade-offs, but together they make up the foundation of crypto trading, payments, and DeFi.
FAQ
Q1. Which stablecoin is most trusted?
USDC is considered the most transparent and regulated, while USDT dominates in adoption.
Q2. Which stablecoin is best for DeFi?
DAI is the most widely used decentralized option.
Q3. Which stablecoin protects against inflation?
PAXG (gold-backed) can serve as a hedge.
Q4. Is BUSD still safe?
Yes, existing BUSD is redeemable, but no new issuance β so adoption is declining.