Tether (USDT) remains the largest stablecoin in the market, with a market capitalization of over $86 billion as of May 2023. However, its dominance may be challenged by the emergence of new competitors such as USDC, a stablecoin fully backed by US dollars held in reserve by regulated financial institutions, and decentralized stablecoins like DAI.

Additionally, regulatory risks associated with Tether may limit its growth and open up opportunities for other stablecoins to gain market share. Despite concerns over a potential US default, both USDT and USDC have shown little volatility during the ongoing drama surrounding the US debt ceiling, reflecting the growing importance of stablecoins in the cryptocurrency ecosystem.