USDC Overtook USDT as the Most-Used Stablecoin Among Institutions: GENIUS Act Compliance Is Why

An EY-Parthenon and Coinbase survey of 351 institutional investors shows USDC used or held by 86% of respondents in January 2026, up from 55% in January 2025, while USDT declined from 57% to 68% over the same period.

What the Data Shows

According to tweet by Coindesk, the survey tracks stablecoin usage among firms that currently hold or use stablecoins, comparing January 2025 to January 2026 responses across five stablecoin categories. USDC’s jump from 55% to 86% represents the largest single-year movement of any asset on the chart. USDT grew from 57% to 68%, also a meaningful increase, but finished 18 percentage points behind USDC in the January 2026 reading.

Euro Coin held relatively flat at 31% to 30%. USDS and Dai declined from 36% to 26%. PayPal USD grew slightly from 20% to 26%. The chart includes a specific annotation noting that U.S. stablecoin investors are much more likely to hold USDC at 94% compared to non-U.S. geographies at 69% on average. That geographic split explains a significant portion of the gap between USDC and USDT at the institutional level. USDT’s dominance in global market cap is driven heavily by emerging market adoption and retail usage outside the United States. U.S.-based institutional investors are choosing USDC at rates that reflect a different set of priorities.

Why USDC Is Winning the Institutional Market

The EY-Parthenon framing attributes USDC’s institutional preference to stronger GENIUS Act compliance positioning. The GENIUS Act is the Senate stablecoin legislation that reached an agreement in principle on the yield question this week, as covered in earlier reporting today. USDC, issued by Circle under U.S. regulatory oversight with full reserve transparency and regular audits, is structurally aligned with the compliance requirements that the GENIUS Act is expected to codify. Tether operates under different regulatory oversight with a less transparent reserve structure that has historically created hesitation among compliance-sensitive institutional participants.

For a chief compliance officer at a hedge fund or asset manager deciding which stablecoin to hold as operating capital or collateral, the regulatory certainty question matters more than the market cap figure. USDC’s reserve transparency, U.S. regulatory positioning, and alignment with anticipated GENIUS Act requirements make it the lower-compliance-risk choice. The survey data reflects that calculation being made at scale across the institutional market.

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How Stablecoins Are Changing Institutional Risk Frameworks

The right side of the survey chart tracks how stablecoin adoption has affected institutional risk management and treasury frameworks. Sixty percent of respondents report an increased focus on counterparty and custody risk since adopting stablecoins. Fifty-six percent introduced new liquidity management or intraday funding considerations. Forty-nine percent cite encouragement toward 24-hour or cross-asset settlement capabilities. Twenty-five percent have reduced settlement-related capital or margin requirements.

Those findings describe stablecoins not as a passive treasury holding but as an active force reshaping how institutions think about liquidity, counterparty exposure, and settlement infrastructure. The 49% figure on 24-hour settlement is particularly relevant given the broader week’s developments. The S&P 500 tokenized perpetuals product on Hyperliquid, the Nasdaq tokenized equity pilot, and Amundi’s 24-hour mutual fund all represent the destination that 24-hour settlement infrastructure is building toward. Institutions adopting stablecoins are being pulled toward that continuous settlement model whether or not they are explicitly targeting it.

Only 8% of respondents report no significant impact on existing frameworks. The overwhelming majority of institutions that have adopted stablecoins have had to modify how they manage risk, liquidity, and settlement as a direct result.

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