Stablecoin Market Dominance by Tether and Circle Criticized at Consensus Conference

Ben O'Neill, head of liquidity at Bridge, expressed concerns at the Consensus conference regarding the dominance of Tether and Circle in the stablecoin market. According to ChainCatcher, O'Neill argued that the leading positions of these two issuers are generally detrimental to the industry's growth. He highlighted that while both Tether and Circle have their design advantages and disadvantages, they are not suitable for all use cases. Tether has created a dollar shadow economy independent of the U.S. financial system, whereas Circle's USDC is regulated by the U.S. and focuses on DeFi. O'Neill analyzed the shortcomings of these issuers from the perspective of large payment companies. He noted that Tether's redemption fee of 10 basis points is too costly for payment companies, and Circle's increasing destruction fees negatively impact companies like Visa that aim for multi-trillion-dollar card settlements. O'Neill emphasized the need for more stablecoins tailored to specific use cases and optimized over the coming years. He also predicted the rise of clearinghouses to facilitate efficient exchanges between stablecoins. He warned that without increased competition, Tether and Circle might continue raising fees and withholding profits, making stablecoins less like money.