The market capitalization of stablecoins exceeded $250 billion in early June 2025. The segment leader is Tether (USDT) with a capitalization of over $153 billion, followed by $USDC from Circle with $61 billion.
Stablecoins have transformed from a niche tool for crypto traders into a full-fledged alternative to traditional banking.
The evolution of stablecoins
Initially, stablecoins like Tether (USDT) emerged as a response to the needs of crypto traders: to lock in profits from trading Bitcoin and altcoins, as well as to quickly move capital between exchanges for arbitrage operations.
They served as the 'digital dollar' within the crypto market at a time when banks were reluctant to cooperate with crypto exchanges, and direct and rapid exchanges of cryptocurrency for fiat were limited.
In 2024, a significant portion of transactions with stablecoins was still initiated by bots and large traders. A study by Visa and Allium Labs showed that out of $2.2 trillion in total transaction volume, only $149 million was 'organic payment activity.'
“This indicates that stablecoins are still in the early stages of their evolution as a payment instrument,” said regional manager of Airwallex Pranav Sud at that time.
However, gradually the advantages of stablecoins are becoming more and more evident to a wide range of users. This is facilitated by:
speed and low fees. International payments using stablecoins are significantly faster and cheaper compared to traditional bank transfers;
round-the-clock availability. Transactions with stablecoins can be conducted at any time without weekends;
asset control. Stablecoins provide the ability to conduct transactions under currency and other regulatory restrictions;
financial inclusion. Stablecoins have opened access to international markets and payments for people without bank accounts or living in regions with underdeveloped banking infrastructure.
The rise of the decentralized finance (DeFi) sector in 2020 played an important role in popularizing stablecoins.
DAI tokens, $USDC and USDT became the 'fuel' for DeFi protocols, used for lending, borrowing, providing liquidity, and generating yields. This symbiosis created a stable demand for stablecoins and stimulated further growth in their capitalization.
“By 2025, stablecoins are increasingly being used for everyday financial transactions. Companies like Meta are exploring the possibility of integrating them into their platforms, and within the crypto industry, the number of those who use USDT and USDC solely for business and personal transactions is growing,” claim Gem Wallet.
Investment opportunities of stablecoins
Over the past five years, stablecoins have ceased to play the role of 'fiat substitutes' for transferring funds between exchanges and users. Today they offer yields that can surpass traditional banking products and serve as an alternative way to invest in assets like gold.
“For example, if EURT is a simple analogue of the euro, then Ondo US Dollar Yield (USDY) is already a more complex financial instrument with a built-in mechanism for generating returns of over 4% per annum,” comment Gem Wallet.
Also, one of the attractive aspects of stablecoins has been the ability to earn passive income through DeFi platforms like decentralized exchanges (#DEX ) and lending projects. In May, lending protocols outpaced DEX in volume.
Apollo Capital founder Henrik Andersson linked this to the fact that lending has become the only sustainable source of income in DeFi. According to him, DEX liquidity pools are losing attractiveness due to impermanent losses and increasing competition.
The yield from the aforementioned stablecoin applications often exceeds the interest rates on traditional bank deposits.
“Even simple flexible deposits in USDT on CEX like Binance can yield up to 7% per annum,” note Gem Wallet.
For comparison: traditional dollar deposits in banks of developing countries often offer lower yields of around 1% and below.
In the US, as of June 2025, the average rate is around 0.42% APY, although individual offers for high-yield savings accounts can reach 5% per annum. In CIS countries, rates for dollar deposits may be higher; however, they are associated with local economic and regulatory risks and often require meeting certain conditions (large sums or long terms).
“It’s important to understand that high yields in DeFi are associated with increased risks, including vulnerabilities in smart contracts and developers’ dishonesty. The difference in yield between stablecoins and bank deposits is not a 'free lunch' but a price for risk.
Moreover, the entry threshold for DeFi is higher. While opening a bank deposit can be done in two clicks, purchasing or exchanging stablecoins is a more complex task for beginner crypto investors,” emphasize Gem Wallet.
In addition to fiat-backed stablecoins, there are tokens backed by other real assets, such as gold. A prominent representative of this category is Tether Gold (XAUt), whose capitalization exceeded $830 million in July.
Each XAUt token represents ownership of one troy ounce of physical gold, which is stored in a vault in Switzerland. The token offers several advantages over its traditional counterpart:
divisibility. Unlike bars, XAUt tokens can be divided into fractions (up to 0.000001 troy ounces), making investments in gold accessible to people with small capital;
transportability and storage. Like any other digital asset, XAUt is easy to transfer and store in a crypto wallet. This eliminates the costs and risks associated with physical storage and transportation of gold;
availability. Unlike the limited hours of precious metal markets, trading XAUt tokens is possible around the clock on Bybit, OKX, Bitfinex, and other crypto exchanges;
no storage fees. XAUt is stored just like any other digital asset. A one-time fee is charged only when purchasing or redeeming tokens from the issuer.
The attractiveness of Tether Gold, PAX Gold $PAXG and other similar tokens lies not so much in the abstract idea of 'gold on the blockchain' but in solving real problems associated with owning precious metals. They democratize access to this asset class, making it more convenient, liquid, and accessible to everyone,” note Gem Wallet.
Stablecoins offer not just an alternative to bank deposits but a fundamentally different approach to financial management. Users can choose their level of risk and potential yield, actively participating in DeFi or opting for more conservative savings methods like XAUt.
However, such an approach requires greater financial literacy and competence. To manage digital assets, it is important to choose a reliable cryptocurrency wallet that ensures security and convenience in working with them.
