2 hours ago
24
The stablecoin market has ballooned to roughly $300-322 billion in total capitalization, more than doubling from approximately $124 billion at the end of 2023.
Most of that supply sits in just two tokens. Tether’s USDT commands around $180-190 billion, or roughly 60% of the market, while Circle’s USDC holds about 24% at $73-77 billion. Together they account for an estimated 83-85% of all stablecoins in circulation. Non-dollar stablecoins, for all the talk of euro or yuan alternatives, represent less than 0.5% of the total.
The GENIUS Act changed the rules
The regulatory picture shifted dramatically in July 2025 when the GENIUS Act was signed into law. The legislation created a federal framework allowing approved institutions to issue stablecoins backed one-to-one by dollar-denominated assets, typically short-term Treasury bills.
Stablecoin issuers like Tether now hold substantial portfolios of Treasury bills to back their tokens. Under various growth forecasts, that demand for US government debt could reach hundreds of billions, or even trillions, by 2030. Treasury Secretary Scott Bessent has argued this creates a structural bid for American debt, one that could push yields lower and extend dollar influence into corners of the global economy that traditional banking never reached.
Not everyone is convinced
Harvard economist Kenneth Rogoff has raised pointed concerns about the risks lurking beneath the surface. His argument centers on vulnerabilities that echo historical banking crises: concentrated reserves, potential runs, and the possibility that stablecoins become conduits for illicit finance. When two issuers control 85% of a $300 billion market, the failure of either one would not be a contained event.
The market’s growth has been uneven throughout 2026, with periods of stalling or slight contraction as crypto trading volumes fluctuated. Recent inflows, particularly into USDC, which added hundreds of millions in supply within a single week in September 2026, pushed totals back toward the $300 billion threshold.
Dollar dominance by digital default
The European Central Bank’s Isabel Schnabel and Cornell economist Eswar Prasad have both suggested that dollar-pegged stablecoins may actually solidify US monetary dominance rather than undermine it. The reasoning is straightforward: network effects are powerful, and when 99.5% of stablecoins are denominated in dollars, switching costs for users and platforms become enormous.
For investors, if stablecoin issuers become significant, price-insensitive buyers of short-term Treasuries, they could compress yields at the front end of the curve regardless of what the Federal Reserve intends.
A market where two private companies hold the keys to $250 billion-plus in Treasury demand is a market with single points of failure that did not exist five years ago. If Tether or Circle ever faced a serious crisis of confidence, the resulting Treasury liquidation would not stay contained within crypto markets.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
English (US) ·