A recent analysis by Moody’s confirmed that Circle and Tether are unlikely to face a surge of new competitors in the stablecoin sector until mid-2025. The report highlights significant barriers to entry that ensure their continued dominance.
Regulatory Barriers Shield Circle and Tether
According to Moody’s analysis, Circle and Tether maintain leading positions in the stablecoin market due to regulatory barriers preventing easy entry for new competitors. Both companies have substantial reserves and are entrenched in financial networks. Regulatory frameworks largely favor existing stablecoins, making it challenging for new players to achieve meaningful entry.
Regulations Ensure Stability for Current Leaders
Circle and Tether's dominance seems secure, reassured by regulatory support. New competitors face high entry costs, rendering the market landscape stable for existing incumbents. Moody's data emphasizes regulatory difficulties for newcomers, reflecting in their restricted financial and operational capabilities.
Newcomers Struggle Amidst Established Leaders' Advantage
Past stablecoin entries, like Terra UST, struggled with trust and market scale due to regulatory challenges. These instances highlight the hurdles newcomers face entering a well-entrenched market. Experts suggest that Circle and Tether's operational scale gives them substantial advantages. Justified by data and historical outcomes, new stablecoin projects appear less likely to disrupt current leaders.
Moody’s analysis demonstrates that Circle and Tether are secured by advantages stemming from existing regulations and the challenges faced by new players, which makes their leading positions in the stablecoin sector resilient in the coming years.
