Tether and Circle Fuel Market Debate With $3B Stablecoin Minting Amid Regulatory Pressure

Tether (USDT) and Circle (USDC) have sparked intense debate after minting nearly $3 billion worth of stablecoins within 24 hours. The surge comes despite relatively stable transaction volumes for both tokens, raising questions about the necessity of injecting such large amounts of liquidity into the crypto ecosystem. While the stablecoin market has been growing rapidly, the lack of transparency around reserves and audits has heightened community skepticism.

Recent data shows stablecoin supply and trading activity reached record highs last month, though analysts note much of the trading may be driven by bots rather than organic demand. With competitors exploring new ways to gain market share, Tether and Circle appear determined to defend their dominance. In fact, Tether issued around $5 billion in new tokens just a week and a half ago, while Circle has been minting smaller amounts to keep pace.

Still, the motive behind these aggressive minting sprees is unclear. Neither USDT nor USDC has seen corresponding spikes in usage, leaving investors to speculate. Some analysts suggest the moves could be tied to liquidity management or even market manipulation, fueling bearish sentiment across crypto social channels. Tether’s lack of a verified third-party audit remains a major concern, especially with looming regulations such as the proposed GENIUS Act in the United States. If enacted, the legislation could require stablecoin issuers to hold U.S. Treasury bonds as backing and submit to regular audits, conditions both companies have yet to meet.

Although both firms have been heavily investing in Treasuries, their reserves still fall short of fully covering minted tokens. Until greater clarity emerges, speculation around Tether and Circle’s strategy—and the long-term stability of USDT and USDC—will likely continue to dominate the conversation in crypto markets.