Key takeaways

• Stablecoin distribution decides the market because the products are nearly identical, and on 7 October 2026 CoinGecko showed Tether's USDT at about $184.1 billion of a $293.6 billion stablecoin market, roughly 63%.

• Circle, the issuer of USDC, pays heavily for shelf space, with Coinbase-linked distribution costs of about $1.4 billion in 2025, roughly 51% of Circle's revenue.

• PayPal's PYUSD had hundreds of millions of existing customers and still sits at about $2.9 billion, about 1% of the market, because having users isn't the same as being the default.

Stablecoin distribution is the cleanest experiment crypto has in what actually wins a market. Take the logo off a stablecoin and what's left is a digital dollar, backed by cash and short-term US government debt, that you can swap back for a real dollar. USDT and USDC do the same job in the same way, and at AnkhLabs we'd put the lesson simply, which is that when the products are this close, something other than the product has to decide the winner.

The market has answered loudly. On 7 October 2026, CoinGecko's stablecoin category showed $293.6 billion in total stablecoins, with Tether's USDT at $184.1 billion and USDC at $74.1 billion, and winning pays, with Tether reporting over $10 billion in profit for 2025. We've told the story of how Tether became crypto's most profitable company separately. This piece is about the mechanism underneath it, which applies to every protocol selling something its users can't tell apart from the alternative.

When the product is a commodity, the margin belongs to whoever owns the shelf.

What is a stablecoin distributor?

A stablecoin distributor is any exchange, wallet, fintech app or payment company that puts a stablecoin in front of users and holds their balances, usually in return for a share of the interest the issuer earns on its reserves. Distributors decide which dollar token a user sees first, so they capture much of the value.

The price of distribution is written into public filings. Under the deal between Circle and Coinbase, Coinbase keeps the reserve interest on USDC held on its own platform plus half the interest on USDC held everywhere else. That paid Coinbase $910 million in 2024, and analysis of Circle's filings showed it kept $768 million of the $1.6 billion it earned that year after paying for distribution.

In 2025 the bill grew with the business. Circle's revenue and reserve income rose 64% to $2.7 billion and USDC in circulation grew 72% to $75.3 billion, while distribution, transaction and other costs came to about $1.46 billion. Circle's own 10-K put its Coinbase-linked distribution costs at $1.4 billion, roughly 51% of revenue. The number-two stablecoin gives away about half its income for shelf space, and it is still the right trade, because without the shelf there is no product.

Market caps are from CoinGecko's stablecoin category page as read on 7 October 2026, with shares calculated against its $293.6 billion category total on the same day. Other trackers publish different totals because they count a different set of tokens and take their snapshot on a different day. CoinDesk Data, for example, put the market at $311 billion at the end of August 2026. We use one source and one date here so the shares compare like with like.

How do stablecoins grow?

Stablecoins grow by becoming the default dollar in places where people already move money, such as exchange trading pairs, wallets, payment apps and remittance networks. Growth comes from placement and partnerships far more than from features, because a user rarely chooses a stablecoin and usually takes whichever one is already there.

USDT is the clearest case. It spent a decade becoming the default trading pair on exchanges and the working dollar of emerging markets, and it keeps signing placement deals, like the Telegram integration that put $730 million of USDT into chat users' hands within six months. Tether claims 500 million users, and while that is a self-reported figure, nobody disputes how it got there. For the demand side of the same story, see why stablecoin adoption became 2026's biggest crypto story.

The same logic holds well outside stablecoins. For Pudgy Penguins, AnkhLabs built a waitlist funnel on viral referral using Telegram's native mechanics, and it reached 2M+ users on the waitlist, as reported by client and platform data. The funnel went to the place where the users already were instead of asking them to come somewhere new.

PYUSD proved that having users isn't distribution

PayPal ran the experiment everyone should study. It launched its own stablecoin, PYUSD, with the best starting position imaginable, hundreds of millions of existing customers, and on 7 October 2026 PYUSD sat at about $2.9 billion, about 1% of the market. Its big growth moment came from renting demand with subsidised yields on Solana lending apps, and when those subsidies shrank, PYUSD on Solana dropped 42% in one month, with one flagship "7.5% yield" turning out to be 6.5 points of PayPal's money on one point of real demand.

PayPal's customers had no reason to hold a new coin inside payment flows that already worked for them, and rented demand left when the rent stopped, exactly like every points program before it. An app with users has an audience, while distribution means being the dollar those users meet at the moment they need one.

Why banks and Western Union are betting on distribution

The field is getting crowded in a very telling way. A group of 21 firms including Goldman Sachs, Bank of America and Citi plans to set up a company in the second half of 2026 and launch a joint dollar stablecoin in the first half of 2027. Western Union launched USDPT on Solana on 4 May 2026, issued by Anchorage Digital Bank and built to settle with its agents around the clock, with a consumer service planned across more than 40 countries.

None of these firms think their token will be technically better. Each is betting that its existing network, whether bank clients or cash-out agents, can become the default shelf. The rules shape that fight too, because paying users rewards for holding stablecoins was one of the disputes that sank the CLARITY Act, which failed a 49 to 50 Senate vote on 15 September 2026, and we covered what the CLARITY Act's failure means separately. For distributors, it means reward-based growth stays legally contested in the US while placement deals carry on.

What we'd tell a founder about stablecoin distribution

Assume your product is more of a commodity than you think. Every DEX, lending app and layer 2 believes it's special, but to users most of them are USDT versus USDC, interchangeable at the moment of choice. List what a user actually loses by picking your closest competitor, and if the honest list is short, your roadmap is a distribution roadmap.

Buy distribution openly instead of renting demand quietly. Circle's approach of paying a partner a contracted share of real revenue for real placement built something that lasts, while PayPal's approach of subsidising yields made demand appear and then evaporate on schedule. The difference is where the money goes, because one puts you in front of users at their moment of choice and the other pays users to pretend they chose you.

Hunt for the default position, not the integration. USDT's lead is built from moments where it's simply what's already there, whether that's the trading pair, the wallet default or the remittance rail. An integration a user has to go and find is only a listing, while being what shows up when they don't choose is distribution, and it's worth overpaying for.

Measure demand with the subsidies switched off. The PYUSD lesson applies to every incentivised number on your dashboard. Know exactly how much usage survives at zero subsidy, because that is your real product-market fit, and it's the number investors, partners and the end of your runway will eventually test.

You can see how this thinking shows up in launches in our case studies and in our go-to-market strategy work. If you're working out how a stablecoin or any commodity-like product gets in front of users and want a second opinion on the distribution plan, talk to AnkhLabs.

The margin is on the shelf

The stablecoin market settled crypto marketing's oldest argument with real money. A technically ordinary product with unbeatable distribution earns billions a year, a near-identical product pays about half its income for placement, and a famous brand with every advantage except distribution holds about 1%. Your protocol is playing the same game with smaller numbers, so build the better product and then spend like you know where the margin lives.

Frequently asked questions

What is stablecoin distribution?

Stablecoin distribution is the work of getting a stablecoin placed where people hold and move money, such as exchanges, wallets, payment apps and remittance networks. Because major dollar stablecoins are functionally similar, placement largely decides market share, and USDT's position as the default on exchanges and in emerging markets gives it about 63% of all stablecoin supply on CoinGecko's count for 7 October 2026.

How much does Circle pay Coinbase to distribute USDC?

Coinbase keeps all reserve income on USDC held on its platform and half of the income on USDC held elsewhere. That paid Coinbase $910 million in 2024, and Circle's Coinbase-linked distribution costs rose to about $1.4 billion in 2025, roughly 51% of its revenue.

What is the stablecoin market share of USDT and USDC?

On 7 October 2026, CoinGecko showed USDT with a market cap of about $184.1 billion and USDC at about $74.1 billion, against a stablecoin category total of $293.6 billion. That puts USDT near 63% and USDC near 25%, with every other stablecoin sharing the remaining 12% or so. Trackers that count more tokens report a larger total and slightly lower shares.

Why didn't PayPal's PYUSD stablecoin take off?

PayPal had customers but not a default position, since its users already paid in ways that worked. Most of PYUSD's growth came from subsidised yields, and when those shrank PYUSD on Solana fell 42% in a month. On 7 October 2026 it stood at about $2.9 billion, about 1% of the market.

Are banks launching their own stablecoins?

Yes. Twenty-one firms including Goldman Sachs, Bank of America and Citi plan a joint dollar stablecoin for launch in the first half of 2027, aimed at payments and digital asset settlement. Western Union launched its USDPT stablecoin on Solana in May 2026 to settle with its global agent network.