Over the past 12 months, stablecoins have gradually transitioned from a marginal role in the crypto space to a broader role in financial markets. The data itself tells the whole story: the supply of stablecoins has more than doubled, and the usage by traditional payment networks and institutional participants has surged, showing increasing market interest in these assets. But at a deeper level, there is a structural shift; what was once merely a tool for crypto traders to store profits has now become a transaction layer for emerging economies, a settlement tool in fintech stacks, and a strategic monetary extension of US monetary policy.

This report compares stablecoin usage from mid-2024 to mid-2025, tracking the growth of adoption rates, changes in various regions, and the current status of stablecoins as products and concepts.

Market Capitalization and Usage Growth

The market cap of stablecoins rebounded from about $160 billion in mid-2024 to over $260 billion by July 2025, an increase of over 60%, pushing the total amount of stablecoins in circulation above the peak in 2022, with liquidity reaching new records.

On-chain transaction volumes tell a more telling story. In 2024, stablecoin settlement volumes exceeded the total of Visa and Mastercard, reaching $27.6 trillion. Monthly transaction volumes doubled year-on-year, growing from $1.9 trillion in February 2024 to $4.1 trillion in February 2025. A peak of $5.1 trillion was reached in December 2024, indicating that these funds are no longer confined to the crypto-native realm; in certain ecosystems, stablecoins account for over half of all transaction value.

User Base Expansion

The number of active wallets grew from about 20 million in mid-2024 to around 40 million by mid-2025. The total number of addresses holding stablecoin balances has surpassed 120 million. This growth is not only quantitative but also reflects diversity. An increasing number of small businesses, freelancers, and remittance users are transferring funds through stablecoins, often without directly participating in the broader crypto market.

Institutional Consolidation

In 2024, stablecoins become not only financial tools for crypto companies but are also gradually adopted by fintech companies, asset management firms, and some enterprises. The reason is simple: they provide a fast, programmable, dollar-denominated asset that can be transferred across platforms without relying on traditional banking channels. For companies operating across countries or time zones, this means improved liquidity management, faster internal transfers, and reduced settlement delays.

With interest rates remaining high for most of 2024, depositing idle cash into stablecoins like USDC also becomes more attractive. Many stablecoins are backed by short-term government bonds; although users cannot directly obtain the yield, their reserve structure assures users that the underlying assets are high quality and interest-bearing. For companies seeking a reliable dollar-denominated digital alternative, stablecoins become a viable option.

This year, stablecoins are more deeply integrated into fintech infrastructure. Visa has expanded USDC settlements to Ethereum and Solana. Stripe and PayPal have introduced stablecoin payments to consumer channels. Even banks are beginning to test local stablecoins, such as Standard Chartered's HKD coin, to explore faster cross-border settlements.

Tether achieved $13 billion in profits in 2024, more than double that of BlackRock, highlighting the financial significance of the reserve model. This not only proves that stablecoin issuers support infrastructure but also indicates that they operate extremely profitable businesses. This profitability also translates into sustainability, enhancing user trust and accelerating adoption across the financial sector.

Evolution of Stablecoin Types

Fiat-backed stablecoins dominate.

The market share of fiat-backed stablecoins (fully backed by cash or short-term government bonds) has grown from about 85% in 2024 to over 90% now. The supply of Tether (USDT) has increased from about $83 billion to around $150 billion. USDC has recovered from its low point in 2023 (about $59 billion) and regained institutional favor.

The adoption of stablecoins like PayPal's PYUSD and Paxos's USDP has been moderate, but true growth is concentrated among leading products. User preference for fully backed and transparent reserves has become a widespread expectation, although this also brings trade-offs with centralized custody and regulatory risks.

The Decline of Crypto-Collateralized and Algorithmic Stablecoins

Cryptocurrency-collateralized stablecoins (like DAI) have seen slight growth in absolute numbers (about $5 billion) but a decline in market share. Protocols like Aave (GHO) and Curve Finance (crvUSD) have added hundreds of millions in circulation, but crypto-backed stablecoins have failed to truly breakthrough or collapse.

On the other hand, algorithmic models have almost disappeared. After the collapse of Terra, designs that were not over-collateralized lost trust, with many projects, including Frax Finance, turning to fully fiat-backed models in 2023. Since then, no new algorithmic stablecoins have gained significant attention.

Today, fiat-backed stablecoins dominate in use and consensus. Crypto-backed stablecoins are a small but practical niche market. The algorithmic approach, once seen as mainstream, has largely exited the market.

The Rise of Yield-Generating Stablecoins

An emerging category to watch in 2025 is yield-generating stablecoins, which are not only used for value preservation but also for appreciation. Unlike traditional fiat-backed or over-collateralized models, these tokens explicitly integrate yields from real-world or on-chain strategies into their structure. Two typical examples are Ethena's USDe and Resolv's USR.

Ethena Labs' USDe adopts a delta-neutral strategy, maintaining its peg by pairing staked ETH collateral with perpetual short positions while generating synthetic yield. This yield is passed to holders through an additional token, sUSDe. This model has attracted early attention due to its composability, transparent yield mechanism, and ability to generate income without relying on centralized reserves. By mid-2025, the supply of USDe remains far below that of major stablecoins, but it is one of the few projects to achieve significant adoption and maintain stability in the post-Terra experiment.


In contrast, Resolv Labs links yield to real-world interest-bearing assets, creating a structure closer to tokenized government bonds but existing in stablecoin form. USR aims to provide stable returns for users while maintaining its peg by collaborating with off-chain credit and structured products. This is a more institutional approach, primarily focused on DeFi protocols and early lending platforms.

These models are still in the experimental stage, with adoption rates far below those of fiat-backed stablecoins. However, they represent a clear trend: users not only seek stability but also wish to earn passive income. The challenge remains to maintain transparency, peg stability, and regulatory clarity. If any of these waver, confidence will quickly erode.

Currently, yield-generating stablecoins have carved out a place. They have not replaced USDT or USDC but have expanded the design space, offering a more capital-efficient choice for users willing to accept different risk preferences. Whether they can scale without inheriting the vulnerabilities of previous algorithmic stablecoins remains to be seen. But for now, they are valued more than any attempts post-UST collapse.

Regional Behavior Shift

Emerging Markets: Latin America, Africa

Motivation: Stability and Access to Dollar Exposure

In countries facing inflation and currency volatility, stablecoins are increasingly becoming an alternative to the digital dollar. Argentina, Venezuela, and Nigeria are examples. In 2024, when the local currency depreciates, demand for USDT surges. By 2025, holding digital dollars has become a normal practice for individuals and merchants.

In Africa, foreign exchange shortages affect over 70% of countries, and stablecoins have now become a bridge connecting local economies to global capital. Exchanges in Nigeria often quote prices in USDT. When banks cannot provide dollars, businesses pay overseas suppliers with stablecoins.

Remittances and Payments

The migration of remittance paths to stablecoins is significant. In 2024, cryptocurrency-based cross-border transfers in Latin America grew by over 40%. By 2025, applications like Binance P2P and Airtm have become primary remittance tools for the entire community.

The average cost of sending $200 through stablecoins in Sub-Saharan Africa is about 60% lower than traditional remittance channels. This is not a marginal improvement but a transformative impact and reflects product-market fit.

Preferred Platforms and Tokens

Tron has become the dominant public chain for stablecoin activities in emerging markets due to its low fees, with most niche and P2P markets using USDT on Tron. BSC and Solana have also gained market share, but in many regions, Tron remains the default choice.

USDC is gradually penetrating traditional financial payment channels, especially when regulatory scrutiny or institutional relationships become focal points. However, for ordinary users, USDT still holds an absolute advantage.

Regulatory Attitudes

Governments remain cautious. Brazil has introduced digital asset regulations and is exploring central bank digital currency (CBDC). South Africa is developing guidelines for stablecoins. Most other emerging markets remain watchful. While recognizing their utility, there are concerns about dollarization and capital flight. Currently, basic usage is tolerated, especially in the absence of alternatives.

Asia: Clear Regional Differences

Southeast Asia and South Asia

In Southeast Asia, the use of stablecoins is more related to access channels rather than inflation. In countries like the Philippines and Vietnam, remittances are the main driver. Overseas workers send USDT or USDC back home through apps like Coins.ph or BloomX. In India, traders and freelancers utilize stablecoins to transfer funds between platforms to reduce slippage.

Vietnam excels in retail crypto adoption. Singapore, on the other hand, takes a more institutional approach, granting licenses for stablecoins and encouraging standardized issuance.

East Asia and Financial Centers

Hong Kong and Singapore are positioning themselves as regulatory financial centers for stablecoins. The Monetary Authority of Singapore (MAS) implemented clear guidelines (reserve backing, redemption terms) by the end of 2024. By 2025, USDC and regional stablecoin issuers are applying for licenses in Singapore.

Japan allows banks to issue stablecoins under a legal framework established in 2023. Currently, there are several yen-pegged stablecoins, but they remain niche. In South Korea, the use of stablecoins is still concentrated in trading due to strict regulation.

Mainland China's authorities still ban cryptocurrency-related activities, but USDT is widely used through over-the-counter channels. Reports indicate that a large amount of capital is fleeing through Tether on Tron for trade activities. This is a persistent but unofficial norm.

Developed Markets: Integration Rather Than Replacement

Usage Patterns

In the US and Europe, stablecoins are rarely used for everyday consumption but are embedded in the backend of fintech stacks, corporate finance, and cross-border settlements.

Companies use stablecoins to transfer funds between subsidiaries. Freelancers accept USDC as payment for international work. After the bank failures in 2023, crypto companies now rely on stablecoins instead of ACH or SWIFT for fiat transactions.

Franklin Templeton's on-chain money market fund settles in USDC. Mastercard and Western Union have launched stablecoin-based services. These integrations indicate the complementary expansion of stablecoins in fintech rather than complete replacement.

The EU's MiCA framework takes effect in mid-2024. By mid-2025, non-euro stablecoins will face daily limits, and issuers will need to apply for licenses. The UK has also legislated to recognize stablecoins as digital settlement assets.

The recent passage of the GENIUS Act in the US has just occurred, but its effects have yet to be seen. Previous enforcement actions (like the decline of BUSD) and market behaviors (concentrated around USDC/USDT) indicate that regulators are indirectly shaping this space, and this situation is changing. Stablecoins now account for over 1% of the M2 money supply, and Federal Reserve officials have begun to publicly acknowledge this.

Conclusion: From Parallel Assets to Embedded Layers

From July 2024 to July 2025, stablecoins transition from being primarily crypto-native tools to an independent parallel financial system. In emerging markets, they become solutions to bypass currency collapse and expensive banking services; in developed markets, they are integrated into regulated and compliant workflows.

Market Structure Reflects This Evolution. Fiat-backed stablecoins dominate, with a market share of over 90%. Algorithms and unsupported models, once viewed as the core of 'decentralization', have mostly disappeared. Today, the use of stablecoins is driven more by practicality and trust rather than ideology.

The regulatory environment has not fully kept pace but is advancing. Institutions, banks, fintech companies, and payment giants are gradually adopting them. At this stage, the question surrounding stablecoins is no longer whether they will be regulated, but how they will be regulated and integrated by existing organizations, and how much value they will hold and where that value will flow.

Stablecoins are unlikely to completely replace fiat currencies, but they are already filling gaps in areas where traditional currencies fail, such as non-working hours, cross-border scenarios, or in economies with weak infrastructure.

Future developments will depend on continued practicality, clear rules, and the ability to scale yields without compromising stability or transparency. However, looking back over the past year, the trends are very clear. Stablecoins have found their role, and this role is more significant than most expected.