Over $300 billion of stablecoins now exist on blockchains as cheaper issuance and regulatory clarity fuel the sector’s growth.
The combined supply of stablecoins surpassed $300 billion for the first time in early October, according to DefiLlama data, with a total market capitalization of just above $302 billion.
The market has expanded sharply over the past year, with analytics platforms now indicating that there are nearly 300 separate stablecoin projects across various chains, a far broader field than the few issuers that dominated previous cycles.
The influx of new entrants has eroded Tether’s dominance, which dropped from 86% in June 2020 to about 58.4% as of October, while Circle’s market share grew from 7% to around 25% during the same period, according to DefiLlama data.
Castle Island partner Nic Carter pointed out in a recent X post that the “stablecoin duopoly is ending,” adding that fintechs, exchanges and wallets would rather launch their own dollar-pegged tokens to capture yield otherwise kept by incumbents.
“If you are a crypto exchange with $500m in USDT deposits, Tether is earning around $35m/year on that float, and you’re getting nothing,” Carter noted.
Exchange data from DefiLlama reflects this. On Binance, users hold nearly $30 billion in USDT, followed by $7 billion in USDC. On Bybit, traders hold about $5 billion in USDT and roughly $800 million in Ethena’s USDe stablecoin.
Unlocked Demand
Chiara Munaretto, managing partner of stablecoin-focused media platform Stablecoin Insider, told The Defiant that the market’s growth is the result of the “network effect in motion.”
“Regulatory green lights and successful use cases are signaling to the market that stablecoins are a functional working model. As more projects, payment rails, and banks test stablecoin integrations, they validate the idea that it’s possible, legal, and worth doing. Each new adopter strengthens the loop so more liquidity, more trust, more use,” Munaretto explained.
Eneko Knorr, CEO and co-founder of Stabolut, a Bitcoin-backed stablecoin, told The Defiant that the main reason the stablecoin market is growing so fast is that “large, traditional companies are finally feeling confident enough to get involved.”
“But the most important reason for this growth is that people in finance now understand how useful stablecoins are in the real world. Think about how slow and expensive it is to send money to another country using a bank. Stablecoins fix that,” Knorr added.
Speaking with The Defiant, Anurag Arjun, co-founder of Avail, a modular blockchain base layer, noted that today the risk premium for moving real-world liquidity on-chain has collapsed as the GENIUS and CLARITY Acts “have helped remove grey zones around issuance, payments etc., and supporting infra has matured.”
“Yield and activity further amplify the optics, but the real engine here is this trifecta: legal certainty, interoperable payment rails, and composable issuance tooling. Together they’ve turned stablecoins from speculative instruments into real financial primitives. Demand didn’t just grow; it has been unlocked,” Arjun added.
Crowded Space
Regulatory clarity, driven by the GENIUS Act, has also encouraged new entrants by setting clearer standards for both bank and non-bank issuers, making it easier for traditional institutions to explore stablecoins.
Policy developments are now being matched by rapid technical progress, as a wave of new Layer 1 networks — including Circle’s Arc, Paradigm-backed Tempo, and Bitfinex-supported Plasma — enter the market, with analysts at Keyrock projecting that these advancements could enable stablecoins to capture up to 12% of global cross-border payment flows by offering faster and cheaper alternatives to traditional banking channels.