2 Alternative Stablecoins to Consider for the next Year

Given USDC's importance in challenging USDT's dominance and bringing balance to a highly dominated market, alternative stablecoins may see an increase in demand in 2025.

Stablecoins play a crucial role in the cryptocurrency market and the decentralized finance (DeFi) ecosystem. Among the various stablecoins available, two corporations notably dominate the scene. However, recent developments may pave the way for alternative stablecoins to gain traction in 2025.

One of the leading stablecoins, Circle's USDC, encountered a pivotal shift in its dynamics. As Bloomberg originally reported and Unchained covered further, Circle increased the "standard" redemption fees for USDC on October 29. This fee tier applies to holders seeking to bypass the standard two-day waiting period for "basic" redemptions, enabling them to obtain their dollar amount instantly but at a higher fee cost.

According to analysts, this fee increase may hamper demand for USDC from institutions and high-net-worth individuals engaged in trading, investments, and reserves. Notably, this decision comes amid a loss of market share to Tether's USDT, which surpassed a $120 billion capitalization and achieved over 70% dominance, as reported by Finbold.

“In February, USDC accounted for 31% of the stablecoin market, while USDT represented 52%, but USDC’s market share has since dropped to 20% as USDT’s has grown to 70%.”

2 alternative stablecoins to consider for the next yearGiven USDC's significance in challenging USDT's dominance and bringing balance to a highly dominated market, alternative stablecoins may see an increase in demand in 2025.

The alternatives can vary from similarly centralized solutions like PayPal’s PYUSD or decentralized experiments like Ethena’s USDe, which uses a totally new system based on a drafted model by the known crypto executive Arthur Hayes.

However, users, traders, and investors must understand these alternatives are still mostly experimental, bringing considerable risks.

Maker’s DAI: Leading decentralized stablecoinFirst, Maker’s (MKR) DAI is the third largest stablecoin by market cap, with over $5.36 billion minted. It has 15% of USDC’s $34.87 billion capitalization and 4.5% of USDT’s $120.47 billion market value.

Top 3 stablecoins by market capitalization. Source: CoinMarketCap / Finbold

DAI is an overcollateralized stablecoin, which means that investors must deposit far more nominal value in different cryptocurrencies to Maker’s vaults in order to mint a smaller amount of DAI in a decentralized manner.

However, recent governance moves from the MakerDAO, in an apparently failed rebranding attempt, raised market concerns and negative price consequences. MKR lost over 50% of its value since the rebranding announcement to Sky with the launch of a new token.

MKR holders offloaded their positions as the token would be rendered useless after the rebranding, now halted, was completed. Finbold reported how a MakerDAO’s investor capitulated for less than $2 million from a position previously valued at less than $3 million.

Hatom’s USH: Promising alternative stablecoin for 2025Similar to Maker’s DAI, Hatom (HTM) is in the final stages of launching USH after years of development and tests. Hatom's USH utilizes DAI's battle-tested overcollateralized model to maintain its peg to the U.S. dollar.

At the time of writing, USH is undergoing public testing on an open testnet operating on MultiversX’s (EGLD) Devnet. The decentralized alternative stablecoin can be minted by supplying cryptocurrencies such as EGLD, Bittensor (TAO), wBTC, wETH, USDC, and USDT, as announced on October 28.

The wait is finally over! We're excited to announce the introduction of both USH and Booster V2 on the Public Devnet for the community to start rigorous stress-testing.

We invite you all to explore all the features and put them to the test by accessing any of the links below:… pic.twitter.com/HhsEwb7Cx7

Moreover, Hatom Labs will provide various incentives for users who contribute to liquidity and stake the minted USH in other protocols. At Finbold, we previously covered the protocol as a promising platform for yield farming and earning passive income through lending.

Despite its relatively low market capitalization, the MultiversX blockchain has attracted the attention of key industry players. For instance, Uphold's Head of Research Dr. Martin Hiesboeck highlighted MultiversX as a promising Ethereum rival in an article on X. Notably, Uphold also featured the chain in a closed webinar for institutional investors on October 15.

Additionally, Justin Bons, the founder and CIO of Europe's oldest crypto fund, described EGLD as the “technological Holy