Stablecoins recorded their largest monthly market-cap decline in four years in June, but adjusted settlement volume in the same month rose to a record $1.79 trillion, up 63% from May and 125% from a year earlier. The contrast suggests that the metric investors once used to judge the sector no longer captures how these instruments are actually being used.
A smaller supply base, but heavier use
The report says the drawdown in market value was real, though limited in size. Tether’s USDT fell from about $190 billion in May to about $184 billion in June, while USDC dropped from nearly $80 billion at its March peak to around $74 billion.
On that basis, total stablecoin market capitalization stood at roughly $300 billion, down about 3% from the May high. The article contrasts that move with the roughly 26% contraction seen during the 2022 Terra collapse, arguing the two episodes are not comparable in scale. Because different trackers include different tokens, the cleaner way to present the figure is as a range centered around $300 billion.
The article argues that for the past two years, supply growth and adoption were effectively treated as the same thing because holding and using stablecoins overlapped. In 2026, that relationship started to split: supply moved lower while usage kept compounding higher.
Yield restrictions pushed idle cash elsewhere
According to the report, the GENIUS Act signed in July 2025 explicitly bars issuers from paying interest to holders of payment stablecoins. A draft released by the Office of the Comptroller of the Currency in February this year would extend that restriction to affiliated arrangements designed to replicate yield.
That framework turned stablecoin holdings into an interest-free loan to the issuer, sending idle cash toward other onchain instruments. The report says tokenized Treasury fund assets grew from a record $11 billion in March to nearly $16 billion. Circle’s yield product USYC moved ahead of BlackRock’s BUIDL, while a new JPMorgan product expanded 87% in a single month.
Marquette University professor David Krause said the ban on yield did not remove demand for interest; it relocated that demand. In the pattern described by the article, corporate treasurers park excess cash in tokenized funds yielding 4% annually and only hold stablecoins briefly, in the hours or even minutes around an actual payment.
That leaves less inert balance sitting inside stablecoins, but more working capital circulating through them. Viewed from the outside, falling supply and rising transaction volume are two sides of the same reallocation.
Velocity rose, and USDC gained ground in settlement
Standard Chartered analyst Geoff Kendrick measured stablecoin velocity at about six turns per month, roughly double the level from two years ago. “Velocity has increased, and this runs counter to our earlier assumption that it would remain stable,” he wrote, according to the article.
Visa economists put quarterly stablecoin velocity at 13.56, far above the 1.65 level for U.S. M1 money. In the report’s framing, one dollar in stablecoins is doing about eight times as much transactional work as one dollar in bank deposits.
The pecking order between the two largest issuers has also shifted. In full-year 2025, USDC transfer volume reached $18.3 trillion, above USDT’s $13.3 trillion, even though USDC’s circulating supply was less than two-fifths of USDT’s. In the first half of 2026, USDC accounted for about 70% of adjusted transaction volume, while USDT was down to 25%. In June alone, the figures were $1.21 trillion for USDC and $576 billion for USDT.
The article says the crown for market cap and the crown for circulation volume now sit on different heads. USDT remains the largest offshore dollar savings tool in emerging markets, characterized more by large, static balances. Researcher Boaz Sobrado’s market-share analysis found that each dollar of USDC cycles through roughly 90 transactions a year on average, while nearly three-quarters of USDT’s retail-sized transfers are concentrated in retail holdings that make up only 7% of its total supply. In that reading, USDC has become the settlement tool institutions actually use for turnover.
USDT shrank by about $5.4 billion over 60 days. The article describes that as its largest sustained contraction outside periods of crisis. Even so, at $184 billion, it remains the biggest dollar-denominated instrument outside the banking system. For offshore issuers, the GENIUS Act sets a compliance deadline of July 2028 if they want to stay on U.S. platforms, and part of the contraction may reflect positioning ahead of that date.
Real-world payments are only 1% of flows, but growing fast
The report stresses that raw transfer figures can be misleading. Unadjusted stablecoin transfer volume reached $33 trillion in 2025, and in February that year monthly raw volume briefly climbed to $7.2 trillion, above the ACH network’s $6.8 trillion.
Once bots, wash trading and exchange-internal transfers are removed, using Visa’s methodology, the 2025 total falls to $10.8 trillion. The first half of 2026 had already reached $8.82 trillion on the same basis, with the full year projected toward $17.6 trillion.
Data from McKinsey and Artemis add another layer. In 2025, only about 1% of stablecoin fund flows could be identified as real-world payments, or roughly $390 billion. Of that, $226 billion came from business-to-business payments.
The article breaks the $390 billion down into three segments:
- $226 billion in business-to-business transfers
- About $90 billion in payroll and remittances
- $8 billion in capital-markets settlement
That mix points to businesses, not consumers, as the main engine behind real payment usage. Corporate money moves on schedule to suppliers and payroll accounts; it is not meant to sit still.
Infrastructure firms are tracking different scoreboards
The article closes by noting that infrastructure providers have already shifted the metrics they use. Visa reports its stablecoin settlement business at an annualized revenue run rate of $7 billion, up 50% quarter over quarter and spanning nine blockchains. Mastercard is now settling with six stablecoins across eight chains.
Neither company highlighted market-cap growth. The emphasis has moved to settlement volume, revenue and chain coverage, a sign that the industry’s scoreboard is changing.