The dominance of Tether (USDT) and Circle (USDC) in the stablecoin market is waning, with their combined market share falling to 84%, according to Castle Island Ventures partner Nic Carter. Despite their growing market capitalizations, the duo's share has decreased from a peak of 91.6% in March 2024. Carter attributes this decline to the emergence of new stablecoins, particularly interest-bearing ones, highlighting Ethena's USDe as a notable success with a supply reaching $14.7 billion. Carter anticipates that as regulatory clarity improves globally, including through initiatives like the GENIUS Act and MiCA, traditional financial institutions will enter the stablecoin arena. He suggests that a consortium of banks could effectively challenge Tether's dominance by developing a competitive stablecoin.