A senior executive at one of Germany’s largest institutional asset managers has issued a blunt warning about the structural integrity of the world’s two biggest stablecoins.
Tether and Circle are the two largest stablecoin issuers in the world
Tether issues USDT, the most widely traded stablecoin by volume, while Circle issues USDC, the second largest. As of May 20, Tether’s market cap stands at $189.68 billion while that of Circle’s stands at $76.63 billion, according to CoinMarketCap. Both tokens are designed to maintain a 1:1 peg with the United States dollar, backed by reserves held in cash, cash equivalents, and other assets.
Together they account for the vast majority of the global stablecoin market, which is valued at over $200 billion. Stablecoins are not what they claim to be Christoph Hock, head of Tokenization and Digital Assets at Union Investment, which manages nearly $620 billion in assets, told attendees at the Digital Money Summit 2026 in London on Tuesday that Tether and Circle’s stablecoins are fundamentally misrepresenting themselves to the market, CoinDesk reported on May 19. “To be honest, a stablecoin, from my perspective, is not a stablecoin,” Hock said. He argues that when you examine the reserve assets backing USDT and USDC, what you find looks far more like a hedge fund than a dollar peg.