Stablecoins are shrinking in headline value but accelerating in use, with Tether’s USDT supply falling by $5.5bn since May even as overall transaction volumes across the sector hit all-time highs.
The combined market capitalisation of US dollar-pegged stablecoins has dropped around 4.3% from its peak of $322.41bn in May to about $308.5bn, a fall of roughly $14bn and the sharpest monthly contraction since 2022. In June alone, the sector shed $7.7bn in value – the biggest monthly decline since the collapse of Terra in May 2022.
Yet, in stark contrast, adjusted stablecoin transaction volume climbed to a record $1.83tn in June. That represents a 60% jump on May and more than double the level seen a year earlier, underlining how rapidly the tokens are now circulating through payment and trading systems.
This divergence suggests a structural shift in how stablecoins are being used: fewer “digital dollars” are sitting idle on-chain, while the coins that remain in circulation are turning over far more quickly in payments, trading and settlement.
Tether and USDC supplies edge lower
Tether’s USDT remains the dominant stablecoin by supply, but its circulation has nudged lower in recent months. The amount of USDT in issue fell from $189.54bn on 1 May to roughly $184bn by 29 July, a reduction of about $5.5bn.
Circle’s USDC has followed a similar direction. Its supply declined from $77.27bn to $72.41bn over the same period.
Despite these drops, the current retrenchment is modest compared with the turmoil of 2022, when the overall stablecoin market contracted by about 26% in the wake of Terra’s failure.
Tokenised Treasuries attract capital
Part of the capital flowing out of traditional payment stablecoins appears to be migrating into tokenised Treasury products, which can offer yields that standard payment-focused stablecoins do not pay.
According to data from rwa.xyz, the tokenised Treasury sector has grown from about $11bn in March to more than $16bn. These on-chain instruments have become a draw for treasurers and investors seeking return-bearing assets while still operating within digital-asset rails.
Regulation is reinforcing that split between payments and savings. The GENIUS Act, signed into law in July 2025, bars issuers from paying interest directly on payment stablecoins. That framework pushes corporate treasurers and other large holders towards keeping surplus cash in tokenised funds, while maintaining balances in payment stablecoins primarily for transactional needs.
Turnover accelerates across the network
Evidence suggests stablecoins are circulating far more rapidly than in previous years. A note published by Standard Chartered in March 2026 estimated that stablecoin turnover is now running at about six times per month, around double the pace recorded two years earlier.
Data from Visa also indicates that each dollar held in stablecoins changes hands significantly more often than a dollar parked in a conventional US bank account, underscoring the tokens’ growing role as a high-speed settlement layer.
Despite having a smaller supply than USDT, USDC has emerged as the leading stablecoin for settlement. In June, USDC processed about $1.21tn of adjusted volume, compared with $576bn for USDT over the same period.
Real-world payments still a minority share
Headline blockchain volumes do not all reflect underlying economic activity. Internal exchange transfers, automated protocols and wash trading can inflate raw numbers.
A Forbes report cited estimates from McKinsey and Artemis suggesting that identifiable real-world payments accounted for roughly $390bn in 2025. Of that, business-to-business transactions made up about $226bn, while payroll and remittances contributed around $90bn.
Although real-economy payments still represent a relatively small slice of overall stablecoin flows, that share has grown sharply over the past two years as more firms and individuals experiment with on-chain settlement.
From parked collateral to payment infrastructure
Stablecoin market capitalisation remains a crucial metric for issuers, who earn interest on the reserves backing their tokens. However, for payment networks, processors and financial platforms building on these systems, how frequently each coin moves may be becoming a more important gauge than how many coins exist.
June’s data – combining a modest pullback in supply with record transaction volumes – points to stablecoins evolving away from being largely “parked” collateral towards serving as active, high-velocity financial infrastructure.
The Bank for International Settlements (BIS) says U.S. dollar-pegged stablecoins are repeating a pattern central banks have watched for decades, as private-sector money-like instruments rise in prominence alongside traditional banking systems.
