Stablecoins have become one of the most valuable asset categories in Web3, though many investors may not realize their true potential. Initially designed for trading, stablecoins have evolved into versatile financial tools, now used for a variety of purposes such as peer-to-peer payments, storing value, and more.
Consider the ease with which an investor in Turkey – where inflation is at its peak – can now access the stability of the U.S. dollar through stablecoins like USDC, USDT, and several other cryptocurrencies pegged to the world’s leading currency. This accessibility has brought a new level of financial security to individuals in countries facing economic instability.
In this article, we’ll take a look at the five largest stablecoins in the world and explore their advantages as we move into 2025. Enjoy!
Top 5 USD-Pegged Stablecoins of 2025
The stablecoin industry has undergone significant changes in recent years, with major players like BUSD and UST collapsing for various reasons. As of 2025, several stablecoin projects have emerged as the leaders in the market, solidifying their positions as the most reliable and widely used options in the crypto space. Here’s a look at the top five biggest and most stable stablecoin projects currently dominating the industry.
Tether – USDT
Tether (USDT) is a stablecoin designed to maintain a 1:1 peg with the U.S. dollar, backed by reserves held by Tether Limited. Launched in 2014 by Brock Pierce, Reeve Collins, and Craig Sellars, Tether was originally called RealCoin before rebranding. Its goal was to provide a stable digital asset to ease crypto trading and payments by mitigating the volatility common in digital assets.
Tether offers stability, liquidity, and fast transactions, making it essential for crypto traders looking to avoid price fluctuations. USDT tokens are used across multiple blockchains, including Ethereum, TRON, Solana, Arbitrum, and Optimism. Although Tether originally launched on Bitcoin’s Omni Layer, it now primarily operates on Ethereum and TRON, with Omni support ending in 2024.
Despite its dominance in the stablecoin market, Tether has faced scrutiny regarding the transparency of its reserves. Although the company publishes quarterly reports, it hasn’t completed a full independent audit. Tether has also been fined by U.S. regulators for misleading practices, but remains vital to crypto trading and DeFi.
Recently, Tether has expanded its use on Layer 2 blockchains and new networks like TON, attracting millions of new users. The company claims cooperation with law enforcement is necessary to prevent criminal misuse. While banned in the European Economic Area (EEA), Tether works with U.S. lawmakers to shape stablecoin regulation.
Circle – USDC
USD Coin (USDC) is the second-largest stablecoin in the crypto market, pegged 1:1 to the U.S. dollar. Created by the Centre Consortium, a joint venture between Circle and Coinbase, USDC provides a regulated and transparent way to use digital dollars on the blockchain. Each token is backed by reserves in regulated US banks, including cash and short-term US Treasuries, ensuring its stability.
Initially launched as an ERC-20 token on Ethereum, USDC now operates on multiple blockchains, including Solana, Algorand, and Stellar. Its use extends across payments, DeFi, remittances, and as a stable store of value during market volatility.
In 2023, USDC temporarily lost its peg after Silicon Valley Bank, where Circle held some reserves, faced a bank run. This caused over $1.6 billion worth of USDC to be redeemed, dropping its market capitalization by over $1 billion. However, Circle quickly stabilized the situation, and USDC’s market cap has since recovered, surpassing $65 billion.
USDC is seen as more transparent than USDT, thanks to monthly audits by Grant Thornton and U.S. regulatory oversight. This transparency has made USDC a top choice for both retail and institutional investors. Circle plans to go public with an IPO, expected by mid-2025, which would solidify its position as a leader in the regulated stablecoin space and further boost trust in USDC.
Sky – USDS
USDS, launched in September 2024 under the Sky protocol (formerly MakerDAO), is a decentralized stablecoin designed to improve scalability, user rewards, and regulatory compliance. It is an upgraded version of DAI and, like DAI, is overcollateralized and pegged 1:1 to the U.S. dollar. USDS is backed by assets such as ETH, USDC, and U.S. government bonds.
One of USDS’s key features is its ability to generate passive income for users. Through the Sky Savings Rate (SSR) program, holders earn rewards in the form of Savings USDS (sUSDS) and Sky Token Rewards (STRs). Over time, the value of sUSDS increases, allowing users to redeem more USDS than initially deposited.
USDS also simplifies the upgrade process from DAI with a fee-free exchange through Sky.money. This feature allows users to swap DAI for USDS by simply connecting their wallets.
Compared to DAI, USDS offers higher rewards while adhering to regulatory standards and maintaining decentralization. With over $8 billion in circulation, USDS is already the third-largest stablecoin by market cap.
Although USDS’s smart contract is more complex than DAI’s, a September 2024 audit revealed no major risks. S&P Global Ratings also assigned USDS a 4/5 stability score. The potential addition of a freeze function has sparked debate about balancing security and decentralization. USDS is shaping up as a key player in DeFi.
Ethena – USDe
USDe is a synthetic dollar-pegged asset created by the Ethena protocol on Ethereum. It maintains a 1:1 value with the U.S. dollar through a delta-neutral strategy. Unlike traditional overcollateralized stablecoins like DAI, USDe uses 1:1 collateralization. Users deposit USDT or USDC and receive an equivalent amount of USDe. Ethena then buys ETH or BTC and opens corresponding short positions using perpetual futures, helping manage price volatility and keep USDe stable against the dollar.
This method sets USDe apart from other stablecoins by integrating hedging strategies, in addition to collateralization, to protect against market fluctuations. All operations are secured via smart contracts, with decentralized oracles like Pyth and RedStone ensuring price accuracy and transparency. Trusted third-party custodians hold collateral off-exchange to reduce risk further.
USDe’s stability is also supported by a reserve fund made up of liquid assets like USDC, sDAI, and USTB, which serves as a buffer against unexpected funding events. Ethena’s decentralized governance allows the community to vote on reserve changes and collateral policies.
Unlike the failed UST, USDe avoids such risks by maintaining full collateral and using hedging strategies, not relying solely on algorithmic models. This, combined with Ethena’s yield generation, provides a stable and secure foundation for USDe’s value.
WLF – USD1
USD1 is a fiat-backed stablecoin launched in March 2025 by World Liberty Financial, a project associated with Donald Trump. Designed to maintain a 1:1 peg with the U.S. dollar, USD1’s reserves are held in short-term U.S. treasuries and safeguarded by BitGo, a reputable digital asset custodian. Initially launched on Ethereum and BNB Smart Chain, USD1 plans to expand to more blockchains.
Unlike algorithmic stablecoins, USD1 is backed by real-world assets, giving it a more traditional structure. Users can redeem 1 USD1 for 1 USD, which helps maintain its stability. This model is similar to stablecoins like USDC and USDT, which are also backed by U.S. government treasuries.
USD1’s rapid growth is noteworthy. Within one month of its launch, it reached a $2.1 billion market cap, thanks to its involvement in a $2 billion investment deal with Binance and Abu Dhabi’s MGX. This partnership has boosted USD1’s credibility and visibility, helping it become a key player in the stablecoin space.
Focusing on institutional use, USD1 is positioning itself as an “institutional-ready stablecoin.” It has secured exclusive partnerships with large organizations and is already listed on exchanges like HTX (formerly Huobi) and PancakeSwap. A small airdrop for its governance token, WLFI, shows that USD1 is also engaging with the community.
Though USD1’s success is still uncertain, its growth and institutional focus make it a stablecoin to watch in 2025.
Closing Thoughts
Stablecoins have become one of the most important tools in the crypto world. They offer the stability of traditional currencies while taking advantage of blockchain’s speed, transparency, and efficiency. By maintaining a steady value, usually tied to the U.S. dollar, stablecoins solve one of crypto’s biggest problems: price volatility. This makes them ideal for everyday use, from sending money to family abroad, to trading and saving, to accessing DeFi services.
In regions with unstable currencies or limited banking options, stablecoins offer a safer and faster way to store and move money. For businesses, they simplify cross-border payments and trade. For investors, they offer a way to avoid market swings without cashing out to fiat.
As stablecoins continue to grow in use and adoption, especially across emerging markets, they are shaping a more inclusive and accessible financial system. Whether used for remittances, DeFi, or trade, stablecoins are proving to be a powerful bridge between traditional finance and the future of money.
