On-chain stablecoin volume reached a record 1.5 trillion USD in July 2025, demonstrating a strong recovery of the DeFi ecosystem, particularly thanks to the growth of Ethereum and positive developments in the legal framework.
The fact that USDC leads in DeFi transactions while USDT continues to dominate supply reflects the competition and complex movements among leading stablecoins in today's cryptocurrency market.
MAIN CONTENT
The on-chain transaction volume of stablecoins reached a record high of 1.5 trillion USD in July 2025, affirming the pillar role of DeFi.
USDC leads in DeFi transaction volume, while USDT maintains its number one position in supply and shows strong recovery on lending platforms.
The DeFi ecosystem is recovering thanks to the growth in Ethereum prices, staking capital flows, and the new regulatory framework in the US for stablecoins.
What is the new record for on-chain stablecoin volume in 2025?
July 2025 witnessed on-chain stablecoin volume soaring to 1.5 trillion USD, surpassing all-time highs and marking a significant turning point for global DeFi (Source: Sentora).
Data from Sentora (formerly IntoTheBlock) shows that stablecoin transaction volumes on the blockchain have continuously grown strongly since the beginning of the year. Notably, the increase from 950 billion USD in January to 1.5 trillion USD in July is evidence of the surge in applications and trust in DeFi solutions.
In just the first five days of August, the total on-chain stablecoin transactions reached nearly 200 billion USD, expecting to exceed 1.2 trillion USD in just one month – a figure reflecting the vibrancy and significant changes in the market.
"The on-chain transaction volume of stablecoins reached 1.5 trillion USD in July 2025, demonstrating the core role of stablecoins in DeFi and the appeal of this ecosystem to global investors."
Blockchain analytics firm Sentora, August 2025 report
What factors drive the strong recovery of DeFi in 2025?
The recent recovery of DeFi has been driven by a strong increase in Ethereum prices and clearer regulatory policies for stablecoins, particularly in the United States with the GENIUS Act (Source: Sentora, 2025).
DeFi recorded significant capital inflows into liquidity staking protocols, alongside the price surge of ETH approaching the 4,000 USD mark. The combination of attractive interest rates from staking platforms and expectations for ETH prices has created a favorable environment for new capital to flow into the market.
The GENIUS Act was passed in the United States, laying the first official legal foundation for fiat-pegged tokens like USDC and USDT, helping to bolster the confidence of international investors and drive a surge in on-chain stablecoin transactions.
What is the all-time high Total Value Locked (TVL) in DeFi?
The total value locked across the entire DeFi ecosystem has reached an unprecedented level: 179 billion USD – a new milestone since the past three years (Source: Sentora).
The strong increase in TVL comes not only from new capital inflows but also from the recovery of ETH prices and a series of strong developments in liquidity staking protocols. This marks a strong return of market confidence in DeFi as stablecoins play a central role in most types of transactions.
Compared to the beginning of the year when TVL was around 120-130 billion USD, this growth reflects a significant recovery speed and greater expansion potential as Layer 2 improvements and Cross-Chain solutions become increasingly popular.
"The fact that DeFi's TVL reached 179 billion USD and stablecoin volume increased significantly is the result of the combination of technological development, legal frameworks, and the positive sentiment of large investors towards the DeFi market."
Rebecca Rettig – Legal Director of Polygon Labs, speaking at DeFi Summit 2025, source: CoinDesk
What impact does the rise of stablecoins have on the practical application of DeFi?
The continuous peak of stablecoin volume boosts liquidity, helping DeFi protocols operate effectively and attract massive capital flows both within and outside the cryptocurrency industry.
Stablecoins have now become the primary tool for trading, borrowing, investing, and governance in the DeFi ecosystem due to price stability and ease of convertibility. The growth of stablecoins also helps mitigate strong price volatility risks – a previously inherent weakness of DeFi.
A high proportion of stablecoin transactions also means the ecosystem can easily access institutional capital, promoting the emergence of complex staking, lending, and asset management protocols with solid support from stablecoins.
What position does USDC currently hold in the DeFi ecosystem in 2025?
Circle's USDC is the leading stablecoin in terms of on-chain transaction volume on DeFi protocols in 2025, accounting for 40–48% of total monthly transactions (Source: Sentora).
One notable feature is that USDC captures a larger market share in DeFi compared to other stablecoins due to its transparency regarding reserves, extensive collaboration, and strict legal compliance, especially in the US and European markets. This helps USDC become the top choice for lending, staking, and governance protocols.
USDC's leadership reflects community trust in maintaining transparency standards – a key factor for attracting large capital flows and traditional financial institutions into the cryptocurrency economy.
"USDC is not only a commonly used stablecoin in DeFi but also sets a new standard for transparency, collaborating with traditional financial institutions and regulatory compliance capabilities."
Jeremy Allaire – CEO of Circle, interview with Bloomberg, July 2025
Is USDT losing its position in the stablecoin market?
Although USDC dominates DeFi transactions, USDT remains the largest stablecoin in the world by supply, controlling 61.41% market share with a circulating value of 164.70 billion USD – an increase of 3.28% in just one month (Source: Sentora/X).
USDT recorded significant growth on lending platforms with supply on Aave increasing by 123% since the beginning of the year, reaching nearly 7.5 billion USD. This indicates that the demand for USDT remains very strong, especially in automated lending/payment protocols and cross-chain transactions.
USDT is often prioritized due to its high liquidity, global reach, and low transaction costs – factors that are particularly attractive during the market recovery phase as investors shift to seeking optimized profits from DeFi platforms.
"The supply of USDT on @aave has increased by 123% since the beginning of the year and is nearing 7.5 billion USD."
Sentora, stablecoin analysis report for August 2025
What are the notable comparisons in stablecoin market share in DeFi in 2025?
The trio of stablecoins USDC, USDT, and DAI account for over 90% of total on-chain stablecoin transactions each month. Additionally, ENA USDe is also beginning to enter the game with a 3% share, indicating that there is still room for emerging names.
Stablecoin DeFi Transaction Share (%) Supply Share (%) Notable Role USDC 40–48 About 25 Transparent trading, lending, staking, legal compliance standards USDT 20–27 61.41 Largest liquidity, cost advantage, strong growth in lending platforms DAI (MakerDAO) 17–33 About 6–7 Decentralized stablecoin, diverse collateral strengths Ethena USDe About 3 Under 2 Emerging stablecoin, positioning innovative trends
What keeps USDT's supply position strong despite temporarily losing its DeFi trading advantage?
USDT's ability to maintain its number one supply position relies on deep liquidity, a globally widespread distribution network, and acceptance by major exchanges and traditional partners.
USDT continues to grow on lending platforms, notably with USDT deposits on Aave skyrocketing, reaffirming its pillar position in the DeFi ecosystem, even though its transaction share in DeFi is not yet equal to USDC. The popularity of USDT also comes from its usability and low transfer/integration costs, suitable for small to medium traders worldwide.
Despite fierce competition, USDT effectively leverages its capital preservation elements and transaction speed to meet the demand for storage, cross-border remittances, and optimize liquidity, maintaining its market share even as other stablecoins continue to innovate.
What risks are emerging with major stablecoins like USDC?
Despite holding a leading position in DeFi, USDC also faces security incidents, notably a case where a user lost over 908,000 USD due to scams related to an old smart contract (Source: Sentora).
These incidents highlight the urgent need to strengthen smart contract controls, especially as stablecoins are increasingly used in complex DeFi protocols. Lessons from these cases have impacted community trust and encouraged Circle to continue investing in security technology, transparent reserves, and ongoing auditing processes.
Additionally, Circle boldly announced a large-scale fundraising strategy, planning to raise 624 million USD through a public offering – demonstrating a commitment to expanding product development, solidifying its market position in stablecoins, aiming for a fully diluted market capitalization of 6.7 billion USD.
"Circle continues to focus on product development and expanding strategic partnerships to enhance both the scale and quality of USDC services, promoting a new transparency standard for the global stablecoin sector."
Jeremy Allaire – CEO of Circle, Q2/2025 investor report
How does the growth of stablecoins have a long-lasting impact on the entire DeFi industry?
The strong development of stablecoins is creating a comprehensive 'refresh' for the DeFi industry, shifting the focus from speculative trading to diverse applications like payments, savings, staking, lending, and asset management.
Experts believe that liquidity will ultimately be the foundation for developing the next generation of DeFi protocols – where stablecoins play the role of 'circulating blood' throughout all product models. The spread of stablecoins is also a factor attracting institutional capital and traditional investors as the risk of cryptocurrency price volatility is better controlled.
Messari Research's report in August 2025 indicated that the proportion of stablecoins in the total cryptocurrency market capitalization has increased to 17%, reflecting a new safe zone for venture investments while expanding the support for projects building long-term solutions on the DeFi platform.
Which stablecoin trends are expected to lead the DeFi market in the near future?
Three major trends are multi-chain stablecoin growth, using stablecoins in DAO governance, and integrating stablecoins into global payment channels, which will continue to drive DeFi to a new level (Source: Chainalysis, 2025).
Stablecoins are increasingly expanding their functions, not only serving transactions but also becoming collateral assets, fundraising tools, and risk mitigation instruments for complex DeFi projects. Rapid adaptation to Layer 2 technology and cross-chain interoperability will help reduce fees, increase transaction speeds, and expand the user market beyond traditional blockchains.
Organizations like Visa, PayPal, and Stripe have also conducted trials to integrate stablecoins into payment systems, expecting to open up a phase of cheap and efficient cross-border payments based on blockchain technology.
What issues should the stablecoin and DeFi market pay attention to in the future?
Ensuring smart contract security, maintaining reserve transparency, and adhering strictly to each country's regulatory requirements are major challenges for the global stablecoin/DeFi market.
To maintain sustainable growth, the DeFi community needs to focus on enhancing government cooperation, developing new transparency standards as recommended by organizations such as G7, FATF, and major central banks. Expanding insurance solutions, independent audits, and integrating AI technology into risk control is essential for stablecoin developers.
The synergy of technology – legal frameworks and financial transparency is likened to a 'golden key', helping DeFi and the stablecoin market progress further and more sustainably, creating a core infrastructure for the global digital finance industry for the next decade.
Frequently asked questions
Why are stablecoins important in DeFi?
Stablecoins enable safe transactions, low fees, stable value, bridging traditional money and DeFi protocols, thereby attracting capital and supporting the creation of new products.
What distinguishes USDC from USDT in DeFi?
USDC stands out due to reserve transparency and compliance standards, while USDT is known for liquidity, global accessibility, and low transaction costs.
How does on-chain stablecoin volume affect investors?
The increasing volume of stablecoins indicates strong capital flow, good liquidity, and reinforced trust in DeFi, optimizing investment efficiency and reducing price volatility risk.
What are the biggest risks to stablecoins today?
Smart contract vulnerabilities, cyber attacks, reserve transparency risks, and regulatory changes are the main threats that both investors and stablecoin developers need to pay attention to.
Why is the increase in TVL DeFi a good signal for the market?
A high TVL reflects significant capital returning, efficient protocol operations, and market expectations for long-term growth, driving institutional capital inflows.
What impact does the US passing the GENIUS Act have on stablecoins?
The GENIUS Act creates the first legal foundation for fiat-pegged stablecoins in the United States, enhancing trust, attracting institutional capital, and protecting users in the context of a rapidly developing market.
What are the new trends of stablecoins/DeFi in 2025?
Prominent trends include cross-chain stablecoins, integration into global payments, stablecoin governance in DAOs, and expanding lending and staking applications on Layer 2 platforms.
Source: https://tintucbitcoin.com/stablecoin-dat-ky-luc-giao-dich-thang-7/
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