Stablecoins have moved beyond their original role as trading tools and now sit at the center of on-chain liquidity, serving as always-on rails for storing value, transferring funds, and settling transactions globally, according to a Coin Metrics study written by Tanay Ved and translated by Foresight News.
The report says stablecoin settlement volume has decoupled from spot crypto trading volume since 2025. Adjusted on-chain stablecoin transfers topped $250 billion in a single day this year, while exchange trading volume fell to about $18 billion a day. So far in 2026, adjusted stablecoin transfers have reached a cumulative $41.7 trillion. Even though total stablecoin supply has recently pulled back, the turnover rate of capital on-chain remains above prior years, with usage spreading across exchange liquidity management, DeFi collateral movement, personal payments, and cross-border corporate transfers.
Supply and velocity show a wide gap between USDC and USDT
The study treats supply as the monetary base of a stablecoin and velocity as a measure of how often that supply changes hands on-chain. Looking at both together helps distinguish between stablecoins used intensively in transaction flows and those held more passively as stores of value. The report links that distinction to the core logic of the CLARITY Act, which it says encourages incentives tied to genuine transaction activity rather than yield earned simply by holding tokens.
By that measure, USDC stands out. In 2026, USDC’s annualized adjusted-supply velocity reached 741x, about 10 times USDT’s 74x, even though USDT’s market capitalization was more than $100 billion higher. Put differently, USDC is changing hands far more often on-chain relative to its circulating base.
The report says the 2025 passage of the GENIUS Act gave USDC a regulatory tailwind, reinforcing its network effects in the U.S. compliant market, DeFi, and institutional settlement. USDT’s strengths, by contrast, come from its early lead, demand in overseas emerging markets, and its close ties to Tron, where appetite for dollar-linked assets and cross-border remittances remains strong.
Circle’s USDC overtook USDT in adjusted transfer volume as early as 2024, and the lead widened through 2026. As of August 2026, USDC had processed $32 trillion in cumulative settlement transfers, equal to 77% of the stablecoin market total in the study. USDT stood at $8 trillion, or 19%. Even so, the report notes that the gap has begun to narrow, with USDC daily transfer volume falling back below $100 billion.
Circle’s transaction growth is outpacing supply growth
According to Circle’s second-quarter 2026 earnings, USDC on-chain transaction volume rose 151% year over year to $14.8 trillion in the quarter, while circulating supply growth lagged well behind transaction growth. The report says roughly 95% of Circle’s revenue still comes from reserve interest rather than transaction fees. Circle’s in-house layer-1 chain, Arc, is described as an important effort to build a fee-based revenue stream, which is why the underlying drivers of USDC activity matter.
Method: classifying transfers into flash loans, DEX liquidity, and exchange flows
To explain where these very large transfer totals come from, Coin Metrics extended its earlier Base-USDC framework and used a bottom-up approach. For each chain and each stablecoin, the researchers tagged contracts that generate frequent mechanical transfers: major flash-loan lending protocols, large liquidity pools on leading DEXs, and known exchange wallet addresses.
Transactions were then grouped into three categories:
- flash loans,
- DEX liquidity provision,
- centralized exchange fund flows.
The analysis used raw transfer data from Talos and measured how much of each chain’s total transfer volume fell into those buckets. Coin Metrics said these labels should be read as lower-bound estimates. The remainder includes behavior that was not identified, such as payments, bridge transfers, treasury movements, and other settlement activity.
USDC on Base: concentrated activity led by DEX rebalancing and flash loans
Base, the layer-2 network launched by Coinbase, was the main venue for USDC transfers in 2026. Activity was highly concentrated: more than 90% of USDC transfers on Base passed through just three contracts.
Across the year, liquidity making on Aerodrome contributed the largest share of volume. In the second half, flash-loan arbitrage tied to the Morpho protocol rose quickly. In June alone, daily flash-loan transfer volume on Base briefly exceeded $500 billion. The report says Base’s low fees and deep USDC liquidity make it well suited for large-scale, high-frequency automated strategies.
- Flash loans: 23%. Bots borrow and repay in a single transaction without collateral and use Morpho’s unified contract for cross-market arbitrage.
- DEX liquidity provision: 69%. Automated strategies keep adjusting liquidity in Aerodrome’s two major pools as prices move, creating huge headline transfer volume while net capital and position size barely change.
- Other: about 8%, covering activity outside the tagged flash-loan and liquidity-pool contracts.
USDC on Ethereum: flash loans account for 65%
USDC activity on Ethereum is even more concentrated in flash loans. The report says flash loans made up 65% of total USDC transfer volume on the chain, nearly three times the share seen on Base. Ethereum has deeper USDC liquidity and a more developed lending market, which suits large flash-loan arbitrage. But higher gas costs make it less suitable for the nonstop liquidity rebalancing seen on Base.
- Flash loans: 65%
- DEX liquidity provision: 0.3%
- Centralized exchange fund flows: 2%
- Other uncategorized activity: about 33%
USDT on Ethereum: a bigger role for exchange-related transfers
USDT on Ethereum shows a different mix. Flash loans still account for a major share, but less than they do for Ethereum-based USDC. Centralized exchange flows make up a larger portion, matching USDT’s long-standing role in exchange settlement and liquidity allocation.
The study includes known deposit and withdrawal wallets from centralized exchanges such as Binance and OKX, covering both customer transfers and internal movements between hot and cold wallets.
- Flash loans: 46%
- DEX liquidity provision: 0.3%, mainly from the Uniswap V3 USDT/WETH pool
- Centralized exchange fund flows: 9%, spanning wallet activity from more than 30 exchanges
- Other uncategorized activity: about 45%
USDT on Tron: little DeFi, heavy exchange use, and 80% uncategorized
USDT usage on Tron looks very different from Base and Ethereum. The flash-loan and DEX market-making activity that drives large volumes on those chains is almost negligible on Tron. Of the identified flows, centralized exchange transfers account for the largest share, highlighting Tron’s role as a low-cost rail for exchange deposits and withdrawals.
The report also says uncategorized flow on Tron reached 80%, the highest among the chains studied. That bucket likely includes cross-border remittances and a range of payment use cases.
- Flash loans: almost no meaningful scale. Lending protocols such as JustLend did not generate significant related volume.
- DEX liquidity provision: 0.2%, spread across four Sunswap pools
- Centralized exchange fund flows: 19%, covering deposit and withdrawal wallets from 33 offshore exchanges including Binance, OKX, and Bybit
- Other uncategorized activity: about 80%
Large stablecoin transfer totals do not all reflect end-user payments
The chain-by-chain breakdown shows clear structural differences. USDC on Base and Ethereum is driven mainly by flash loans and liquidity repositioning. USDT on Ethereum serves both flash-loan activity and exchange fund movements. USDT on Tron has almost no large-scale DeFi trading, but it carries the largest block of untagged volume in the dataset.
The report closes by saying stablecoin transfer volume has become large enough to invite comparisons with global payment networks, but most of that flow still reflects internal crypto-market liquidity management: liquidity deployment and rebalancing, arbitrage execution, and settlement between platforms. Those uses are real and they improve liquidity, trading efficiency, and global access in crypto markets.
At the same time, Coin Metrics cautions against treating large transfer totals as a direct proxy for consumer payments or real-economy activity. For now, stablecoins remain primarily the settlement layer of the crypto market, while payments, remittances, and B2B use cases are still developing. In the report’s framing, the quality of stablecoin transaction activity may matter as much as the size of that activity, and differences in supply and velocity offer a direct way to observe how capital moves through the crypto economy.