Stablecoins on the rise
Stablecoins have achieved their largest quarter ever, with an estimated $45.6 billion to $46.0 billion in new issuances during Q3.
This marks a 324% increase from Q2’s $10.8 billion, indicating a significant influx of new capital into the market.
The growth was driven by several issuers: Tether’s USDt (USDT) contributed around $19.6 billion, Circle’s USDC (USDC) added about $12.3 billion, and Ethena’s USDe (USDe) brought in approximately $9 billion, showcasing a blend of established dominance and rising interest in newer, yield-based designs.
In total, the stablecoin market is now valued between $290 billion and $310 billion. DefiLlama reports roughly $300 billion outstanding, while recent industry assessments suggest it leans closer to $290 billion over the past month.
Regardless, the situation remains clear: A more substantial and liquid stablecoin foundation bolsters trading, supports decentralized finance (DeFi) collateral, and facilitates cross-exchange transactions.
Did you know? “Net creations” represent the difference between minted tokens and redemptions — the most accurate measure of how much new supply remains after cash-outs.
Who led the growth?
The majority of Q3’s net growth focused on three stablecoins:
USDT: Led with $19.6 billion in issuances, reinforcing its stronghold across centralized platforms and both layer-1 (L1) and layer-2 (L2) networks.
USDC: Came in second with $12.3 billion, demonstrating an acceleration consistent with broader adoption and easier access routes.
USDe: Gained $9 billion, reflecting demand for yield-focused models amidst ongoing debates around risk, structure, and market dynamics.
Beyond the top three, PayPal’s USD (PYUSD) and Sky’s USDS saw approximately $1.4 billion and $1.3 billion in quarterly inflows, respectively. Emerging players like Ripple’s RLUSD and Ethena’s USDtb also noted modest but steady growth.
As we approach the next quarter, two pivotal questions arise: Can USDC continue to bridge the gap with USDT? And can USDe maintain its rapid growth amidst shifting market conditions and potential regulatory changes?
Did you know? Under the EU’s Markets in Crypto-Assets (MiCA) framework, a stablecoin may be designated as “significant” if it surpasses criteria such as over 10 million users, more than 5 billion euros in value/reserves, or exceeding 2.5 million daily transactions (and over 500 million euros in daily value), which would trigger closer supervision by the European Banking Authority (EBA).
Where the funds are held
On-chain, most of the new funds are concentrated where there is existing liquidity.
Ethereum leads, hosting over 50% of the total stablecoin supply (more than $150 billion).
Tron holds the second position at around $76 billion, favored for low-fee, retail-oriented transactions.
Solana has risen to third place, with over $13 billion in native stablecoins as DeFi activities and payment applications grow.
This distribution reflects users’ daily experiences: Ethereum for liquidity and composability, Tron for speed and minimal costs, and Solana for a more efficient, high-throughput environment.
What’s driving the renewed stablecoin momentum?
A combination of policy changes, market dynamics, and infrastructure enhancements contributed to the resurgence.
Policy clarity: The GENIUS Act introduced the first US framework for payment stablecoins, instilling greater confidence in issuers and networks.
Yield and carry: Attractive yield rates and the growth of tokenized US Treasuries — which expanded from about $4 billion in early 2025 to over $7 billion by June 2025 — attracted more capital on-chain.
Improved infrastructure: Enhanced payment and exchange integrations, along with faster, more cost-effective L1/L2 infrastructure, have streamlined stablecoin usage compared to last year.
Risk management: Part of the increase can be attributed to “dry powder,” as investors opted to park their funds in stablecoins during uncertain market conditions.
Leaders and the hidden nuances
USDT and USDC captured most of the new capital, aided by their exchange listings, extensive trading pairs, and easy accessibility through banks and apps.
Together, they account for over 80% of the market, with new US regulations further solidifying their position.
Ethena’s USDe also experienced rapid growth by providing yield, but its sustainability relies on smooth hedging and market conditions — any disruption could jeopardize its stability.
PayPal’s PYUSD increased due to wider distribution, while Binance USD (BUSD) continued to decline, emphasizing the importance of licensing and banking partnerships.
However, significant growth doesn’t equate to extensive usage: In the last month, active addresses decreased by about 23%, and transfer volume dropped 11%. Much of the new supply appears to be more akin to cash on the sidelines rather than actively circulating funds.
Liquidity remains limited across platforms and blockchains, amplifying volatility during stressful times. New innovations like USDe create fresh demand but also introduce additional risks, which have already drawn greater regulatory attention in Europe.
The overall growth figure is impressive, but the real question is whether that supply translates into sustained activity.
Upcoming trends to monitor
Here are some critical indicators to observe as the market evolves.
Creations against redemptions: Was the $46-billion surge in Q3 a one-off event or the beginning of a new trend?
Issuer competition: Will USDC continue to close the gap with USDT, and can USDe maintain momentum without losing stability? Reserve disclosures will be crucial indicators.
Chain competition: Ethereum, Tron, and Solana will continue vying for market share — monitor whether these shifts are maintained or fade away.
Infrastructure and ETFs: SEC listing criteria and CME’s new SOL options could enhance liquidity and hedging, stabilizing inflows.
Policy developments: The implementation of the GENIUS Act in the US and MiCA in Europe will influence who issues, where, and under what terms.
On-chain dollar ecosystem: Tokenized T-bills and money market funds are building the “yield component” alongside stablecoins, likely anchoring more balances on-chain.
Ultimately, the $46-billion headline figure demonstrates demand, but the real test lies in whether that supply continues to circulate, enhances liquidity, and withstands the next regulatory or market turbulence.
