Rob Hadick, General Partner at crypto venture firm Dragonfly, predicts the current USDT-USDC duopoly will not survive in coming years as new competition emerges. Hadick argues the next wave of stablecoin growth will be driven by payments, distribution, compliance, and real-world financial activity rather than issuance and reserve income. He views the stablecoin industry as only about 5% developed, with new entrants ranging from banks and fintechs to crypto-native issuers positioning themselves to challenge the dominance of USDT and USDC. Hadick stated that the stablecoin space will inevitably become more competitive, with pressure coming from traditional financial institutions exploring stablecoins, fintechs embedding them into existing products, and new issuers designing more flexible tokens.
Hadick Identifies Vulnerabilities in USDT and USDC Positions
Hadick sees specific weaknesses in the current stablecoin leaders across regulation, geography, yield, distribution, and product experience. For Tether, regulatory pressure remains a challenge in certain parts of the world. Yield sharing has become a contested issue, with many users globally expecting some form of economic participation despite potential resistance from banks.
Product experience represents another area of vulnerability. Stablecoins remain difficult for many mainstream users and businesses to access, move, reconcile, and integrate into existing workflows. Hadick noted that geography may be especially important, pointing to stablecoins already being used in major remittance corridors such as the U.S. to India and the U.S. to Mexico. He stated that if a challenger builds superior infrastructure in those corridors, it could begin to chip away at Tether's position in emerging markets, where USDT remains deeply entrenched.
Hadick sees particular vulnerability on the merchant and business distribution side. If new entrants can place their stablecoins inside real payment flows, adoption and volume could grow faster than market cap. There have also been rumors of consortium-style efforts involving major payments players such as Visa and Mastercard.
New Stablecoin Issuers Gain Advantage Through Infrastructure Flexibility
According to Hadick, the biggest advantage for the next generation of stablecoins is incentive alignment combined with infrastructure flexibility. A new issuer can design from scratch around institutional backing, full collateralization, cross-chain DeFi support, commercial customization, and regulatory positioning. That gives challengers room to target specific use cases without inheriting every constraint of the current market structure.
Hadick pointed to companies such as Paxos and Agora as examples of players developing more flexible and composable stablecoin solutions. These products may be optimized for savings, collateral mobility, FX settlement, or other specialized financial use cases. He acknowledged the path will not be easy, noting that liquidity remains hard to build and distribution is even harder. However, if a new issuer finds a foothold in a specific corridor, platform, or business workflow, it can potentially expand from there.
Hadick Says Neutral Issuers Remain Competitive in Stablecoin Market
As banks, fintechs, crypto-native companies, and large platforms enter the market, Hadick still believes neutral non-bank and fintech-issued stablecoins can win a significant share. He reasons that competitive dynamics make it difficult for closed systems to transact with one another without a credible neutral party in the middle.
Hadick views the evolution of issuers such as Circle, Tether, Paxos, and Agora as significant because they are no longer simply issuing tokens but expanding into payments, fintech infrastructure, and global financial services. He views government-issued stablecoins as closer to central bank digital currencies, a separate product category with different trust, privacy, and programmability tradeoffs. In his view, stablecoins and CBDCs should not be treated as the same thing.
Hadick sees the more likely future as not one stablecoin replacing all others but a proliferation of purpose-built tokens. Some will be built for savings, while others will prioritize speed, compliance, settlement, liquidity, or regional payment flows. He stated that most will fail, and the ones that survive will need more than a ticker and a reserve account — they will need distribution, trust, liquidity, regulatory clarity, and a reason to exist.
FAQ
What did Rob Hadick say about the future of the USDT-USDC duopoly?
Rob Hadick, General Partner at Dragonfly, stated that the USDT-USDC duopoly will not survive in coming years. He said it is inevitable that the stablecoin space will continue to get more competitive, with pressure coming from traditional financial institutions, fintechs, and new crypto-native issuers.
Why does Hadick believe new stablecoin issuers can challenge USDT and USDC?
Hadick argues that new issuers have the advantage of incentive alignment combined with infrastructure flexibility. They can design from scratch around institutional backing, full collateralization, cross-chain DeFi support, commercial customization, and regulatory positioning, allowing them to target specific use cases without inheriting constraints of the current market structure.
What percentage of stablecoin development does Hadick estimate has been achieved?
Hadick stated in a previous article that the stablecoin industry is about 5% of the way there, indicating he views the market as still in very early stages of development with major growth ahead.
