Stablecoin Market Cap Surpasses $300 Billion — The Quiet Tectonic Shift Signaled by Crypto's "Dry Powder"

Why it matters: The stablecoin market cap exceeding $300 billion means that the "dry powder" within the crypto asset ecosystem has reached an all-time high. However, the content is fundamentally different from the DeFi bubble in 2021. Real demand such as international remittances, inter-company payments, and dollarization in emerging countries is driving growth, and the enactment of the US GENIUS Act has made this trend irreversible. For banks, an existential crisis of deposit outflows is quietly progressing.

📝 Summary: The stablecoin market cap has surpassed $300 billion, which is not a sign of 2021-style speculative money, but a sign that the digital expansion of dollar hegemony and the structural outflow of bank deposits are progressing simultaneously.

What Happened

• Market Cap — The total market capitalization of stablecoins reached $312 billion, a six-fold increase from approximately $50 billion in early 2020.
• Market Structure — USDT accounts for $184 billion (60.7% share) and USDC accounts for $75.7 billion (24% share), with the top two brands accounting for 93% of the total, forming an oligopolistic structure.
• Trading Volume — Stablecoin trading volume in 2025 will reach $33 trillion, exceeding the total of Visa and Mastercard, an increase of 72% year-on-year.
• GENIUS Act — The first comprehensive stablecoin regulatory law in the United States, signed on July 18, 2025, mandates 1:1 reserves, backing with short-term Treasury bills, and monthly disclosure.
• Bank Moves — JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo are considering jointly issuing stablecoins.

The Big Picture

Historical Context

The history of stablecoins is the history of "trust" in the crypto asset market itself. When Tether appeared in 2014, it was just a "convenient tool" to streamline the transfer of funds between exchanges. Since the DeFi Summer of 2020, stablecoins have grown explosively as the base currency for liquidity supply, leveraged trading, and yield farming, reaching $150 billion in December 2021.

However, in May 2022, the collapse of the algorithmic stablecoin UST/Luna changed everything. $45 billion evaporated in a week, proving that "stability without reserves" is an illusion. In March 2023, the SVB failure temporarily depegged USDC to $0.86, leaving the lesson that "reserves deposited in banks are not safe either."

These two crises determined the structure of the current stablecoin market. Algorithmic types have virtually disappeared, and fiat-backed types have become dominant. The 2025 GENIUS Act legally mandates 1:1 reserve backing and investment in short-term Treasury bills of 93 days or less, officially positioning stablecoins as "regulated digital dollars." The former gray zone existence has become part of the US financial infrastructure.

It should be noted that this institutionalization is not accidental but a strategic choice. The Trump administration explicitly positioned stablecoins as a "device for maintaining dollar hegemony" in an executive order. The fact that the European Central Bank is wary of the spread of dollar-denominated stablecoins in the Eurozone as "digital dollarization" is proof that this strategy has begun to take effect.

Stakeholder Map

By the Numbers

• $312 billion — Total market capitalization of stablecoins, approximately 6x growth since early 2020
• $33 trillion — Annual stablecoin transaction volume in 2025, exceeding Visa+Mastercard total
• 93% — Combined market share of USDT and USDC, a de facto duopoly
• $141 billion — Tether's US Treasury holdings, making it one of the world's largest holders of US debt
• Over $10 billion — Tether's net profit in 2025, with Treasury bill yields on reserves being the main source of revenue
• $6.6 trillion — Amount of bank deposits that could flow into stablecoins, estimated by the US Treasury Department
• $226 billion — Stablecoin usage in B2B payments, approximately 60% of the total
• 0.39% — Average deposit interest rate in the US, a large difference from the 3.5% or more offered by stablecoin investments

Between the Lines — What Reports Don't Say

The most important thing behind this "surpassing $300 billion" is that the phase in which stablecoins exist for crypto assets is coming to an end. 60% of transaction volume is B2B payments, remittance costs have decreased from 6.5% to less than 2% traditionally, and Visa and PayPal are developing their own stablecoins. In other words, stablecoins are no longer "crypto asset dry powder," but are competing with existing international remittance and payment infrastructure. And with the GENIUS Act limiting reserves to short-term Treasury bills, the larger the stablecoin market becomes, the more structural buyers of US debt increase. The real reason why the US government welcomes stablecoins is not consumer protection or innovation promotion, but because geopolitical interests such as the global expansion of dollar-denominated payment networks and the stabilization of Treasury bond demand coincide. The ECB's warning of this structure as "digital dollarization" is nothing more than them accurately understanding the essence of this game.

NOW PATTERN

Path Dependency × Contagion

The institutionalization of stablecoins through the GENIUS Act is creating an irreversible path, and its effects are cascading to bank deposits, the Treasury bond market, and emerging market currencies.

Path Dependency: The path that "digital dollars" have taken cannot be reversed

The enactment of the GENIUS Act has established an irreversible path of "institutionalization" of stablecoins. The question is, where is this path leading?

Path Dependency is a dynamic in which initial choices constrain subsequent options, and beyond a certain point, a change of direction becomes structurally impossible. The turning point for stablecoins was the signing of the GENIUS Act in July 2025.

What makes this law decisive is that it defines stablecoins not as a "threat to be regulated" but as an "infrastructure to be utilized." 1:1 reserve backing obligations, investment restrictions in short-term Treasury bills of 93 days or less, monthly disclosure obligations — these may seem like "strengthening regulations" at first glance. But the essence is the opposite. By following these rules, it gave "permission" for anyone to legally issue digital dollars.

There are three reasons why this path is irreversible. First, Tether has become one of the world's largest bond investors, holding $141 billion in US debt. The US government no longer has an incentive to stop Tether from buying its debt. Second, Circle has turned the cost of regulatory compliance into a competitive advantage as the only major issuer to comply with both the GENIUS Act and EU MiCA. Latecomers cannot withdraw until they recover this investment. Third, the top four US banks, including JPMorgan Chase, are considering jointly issuing stablecoins. Once banks have shifted from being "competitors" to "participants" in stablecoins, the survival of this market is guaranteed by the vested interests of the financial system.

More importantly, the GENIUS Act stipulates that only authorized entities can issue stablecoins after January 18, 2027. In other words, the design is such that the regulatory gate closes after it has been opened. If you don't get on this path now, you may never be able to. Circle's successful IPO (up 675% after listing) is a result of the market accurately pricing in this irreversibility.

Contagion: The $300 billion dominoes will knock down banks, government bonds, and monetary sovereignty in that order

The growth of stablecoins is not limited to internal events in the crypto asset market. A cascading effect is beginning to spread to bank deposits, the Treasury bond market, and the monetary sovereignty of emerging countries.

Contagion Cascade is a dynamic in which changes in one area, when they exceed a threshold, spread to adjacent areas at an unexpected rate. The $300 billion breakthrough for stablecoins means that this threshold has been passed.

The first domino is bank deposits. The US Treasury Department estimates that up to $6.6 trillion in bank deposits could flow into stablecoins. The current average deposit interest rate in the US is 0.39% (0.07% for checking accounts). On the other hand, crypto asset exchanges offer yields of 3.5% or more on stablecoin deposits. This interest rate differential means a shift to stablecoins as a "rational choice" for individual depositors. It is not a rhetorical question that Oliver Wyman's analysis asks, "Will stablecoins disrupt the banking business?"

The second domino is the US Treasury bond market. With the GENIUS Act limiting reserves to short-term Treasury bills, if the stablecoin market expands to $1 trillion, a new structural buyer of short-term Treasury bills will emerge on a scale of hundreds of billions of dollars. According to an analysis by the Brookings Institution, stablecoin issuers purchased approximately $40 billion in short-term Treasury bills in 2024, pushing down 3-month yields by 2-2.5 basis points. This is an "ally" for the US government, helping to finance the fiscal deficit.

The third domino is the monetary sovereignty of emerging countries. More than 90% of stablecoins are dollar-denominated, and in Latin America, 71% of respondents use stablecoins for international remittances. An ECB advisor warned that the spread of dollar-denominated stablecoins in Europe "replicates the patterns observed in dollarized economies." For emerging market central banks, the choice between blocking convenient remittance methods and accepting the erosion of monetary sovereignty is a lose-lose situation.

The reason why this cascade does not stop is that each stage forms a feedback loop that strengthens the next stage. Bank deposits flow into stablecoins → Demand for Treasury bonds increases → The US government supports stablecoins → Regulatory legitimacy increases → More deposits flow in. Now that this loop has started to turn, reversing individual dominoes means rewinding the entire system.

Dynamics Intersection

Path dependency and contagion intersect in a way that reinforces each other. The institutional choice of the GENIUS Act fixes the path, and each time stablecoins grow on that fixed path, the cascading effect on banks, government bonds, and monetary sovereignty expands. And each stage of the cascade (banks' entry into stablecoins, the US government's welcome of Treasury bond demand, and the digital dollarization of emerging countries) further fixes the path.

At the intersection of these two dynamics is the historical project of "reinventing the dollar." Stablecoins began as a crypto asset innovation, but the true engine of their growth lies in the fact that they have merged with the US national strategy of extending its monetary hegemony into the digital space.

$300 billion is just a passing point. If Standard Chartered's forecast of $2 trillion in 2028 comes true, stablecoins will become a structural pillar of the US Treasury bond market, and it will be outdated to talk about them in the category of "crypto assets."

Pattern History

2022: UST/Luna collapse — The "death" of algorithmic stablecoins determined the current market structure

In May 2022, the algorithmic stablecoin UST and its sister token