Points of Focus

• Tether is strengthening its presence in the Middle East through a strategic partnership with Dubai’s DMCC.
• USDT and USDC still dominate stablecoins, but new regulated competitors are beginning to emerge.
• Cross-border payments are expected to drive the next phase of stablecoin growth and competition.

Tether has signed a memorandum of understanding with the Dubai Multi Commodities Centre (DMCC) to explore tokenization, digital asset education, and broader blockchain applications. However, a general partner at venture firm Dragonfly argues the dominance of Tether’s USDt (USDT) and Circle’s USDC (USDC) over the stablecoin market is structurally vulnerable and unlikely to hold through the decade.

JUST IN: 🇦🇪 Dubai's DMCC signs strategic deal with $USDT issuer Tether to expand blockchain, digital assets, and tokenized finance. pic.twitter.com/fqdkwokMx6

— Watcher.Guru (@WatcherGuru) June 16, 2026

Tether moves deeper into the Gulf

The DMCC agreement positions Dubai as a strategic hub for Tether’s expansion into institutional and emerging market infrastructure. DMCC, which operates one of the world’s largest free trade zones and counts more than 24,000 member companies, gives Tether a regulated environment to develop tokenization pilots and build out educational frameworks around digital assets.

The partnership stops short of a licensing arrangement but signals Tether’s intent to embed itself in Gulf financial infrastructure as regional regulators accelerate their digital asset frameworks.

The agreement follows a broader push by Tether into markets outside the United States and Europe, where regulatory uncertainty has weighed on the company’s ability to operate with full institutional backing.

Dubai’s Virtual Assets Regulatory Authority has issued frameworks that allow stablecoin operators to engage with licensed entities, providing Tether a credible on-ramp to Gulf-based institutional clients.

Duopoly under pressure

Rob Hadick, general partner at Dragonfly, argues that the current market structure, in which USDT and USDC together account for the overwhelming majority of stablecoin supply, reflects where the technology is in its development rather than where it is headed.

LATEST: ⚡️ Dragonfly's Rob Hadick says the USDT-USDC "duopoly" won't survive, arguing stablecoins are only 5% developed and challengers will gain ground through payments, distribution, and compliance rails. pic.twitter.com/75l95egQmP

— CoinMarketCap (@CoinMarketCap) June 16, 2026

Stablecoins are roughly 5% developed as a technology and market infrastructure, Hadick said, leaving the bulk of growth ahead for challengers that can compete on payments distribution and compliance rails rather than first-mover brand recognition.

USDT holds about $155 billion in circulating supply, with USDC at approximately $62 billion, according to data as of mid-June. Together, they account for more than 85% of total stablecoin market capitalization.

Hadick argues that payment volume, not speculative trading or decentralized finance collateral, will determine the next phase of stablecoin growth and that incumbents built around crypto-native use cases are structurally exposed to challengers purpose-built for cross-border payments and regulated financial infrastructure.

The GENIUS Act, signed into law by US President Donald Trump on July 18, 2025, established the first federal licensing framework for payment stablecoin issuers in the United States. With implementing regulations due by July 2026 and the law set to take full effect in late 2026 or early 2027, the compliance window is now open, and bank-affiliated and fintech-backed issuers are moving to secure licenses that neither Tether nor Circle currently holds under the federal framework.

Whether Tether’s Gulf expansion and the entry of federally licensed challengers into payments corridors shifts meaningful market share away from USDT over the next two to three years is the open question Hadick’s thesis leaves unresolved.