Interestingly, while Tether lags behind Circle in terms of compliance and has even been marginalized in the U.S. market due to the Trump administration's 'GENIUS Act,' Tether performs much better than Circle when it comes to on-chain tracking and cooperating with law enforcement. Both have catered to regulations in their own ways: Circle focuses on obtaining licenses, depositing funds in U.S. compliant banks, and ensuring real-time transparency of reserves. Tether, on the other hand, has introduced on-chain tracking tools, efficiently cooperates with law enforcement, and discloses reserves quarterly. But compliance isn’t always a good thing. In 2023, Silicon Valley Bank (SVB), Signature Bank, and Silvergate Bank all collapsed in quick succession. Circle had deep ties with these three banks, with $3.3 billion (8% of its reserves) held in SVB, which caused market panic and led USDC to depeg to $0.87. Tether, however, had no connections with these failing banks and gained trust as a result. At the time, the public began to question the reliability of Circle’s compliance narrative, as SVB was a 'compliant bank' within the U.S. regulatory system, yet still failed. This incident highlighted that USDC, which heavily relies on traditional finance, might not be as stable as it seemed. In 2023, USDC faced significant FUD, leading to a 40%+ reduction in circulating supply, shrinking from $44 billion to $24 billion. Meanwhile, USDT grew to $97 billion, a roughly 50% increase. Back in 2022, USDT and USDC had circulating supplies of $64 billion vs. $44 billion. USDC originally had a chance to overtake USDT, but its pursuit of the 'compliance narrative' backfired, which is quite ironic.