Stablecoins surge as policy climate softens

Stablecoin transaction activity climbed to an estimated $33 trillion in 2025, marking a sharp expansion as policy signals from Washington tilted towards regulatory clarity and market participation, according to aggregated industry data and payment-rail analytics reviewed by multiple market observers. The scale of on-chain settlement now rivals major global payment networks, underscoring how dollar-linked tokens have shifted from a niche trading tool to core financial plumbing for crypto markets and cross-border transfers.

The growth reflects a 72% year-on-year rise in transaction volumes, driven by higher usage in trading, remittances and treasury operations across decentralised finance and centralised exchanges. USD Coin accounted for about $18.3 trillion in transfers, retaining its position as the most actively used regulated stablecoin, while Tether remained dominant in circulating supply and offshore liquidity corridors. Market participants said the divergence highlights different use cases: USDC’s strength in institutional settlement and USDT’s role in emerging-market dollar access.

Policy developments in the United States provided a critical tailwind. Lawmakers advanced proposals aimed at establishing a federal framework for stablecoin issuance, reserve management and supervision, easing uncertainty that had constrained banks and payment firms. Regulatory agencies signalled openness to allowing compliant issuers to operate at scale, provided tokens are fully backed and subject to regular audits. These shifts helped bring large asset managers, fintech platforms and payment processors into pilot programmes that use stablecoins for instant settlement.

The changing stance also coincided with growing interest from traditional finance. Several global banks expanded tokenised cash services for corporate clients, using stablecoins to move collateral and manage intraday liquidity. Payment companies integrated stablecoin rails for merchant settlement, citing faster processing and lower costs compared with correspondent banking. Analysts noted that these integrations amplified transaction counts even when end-users were unaware that blockchain rails were involved.

Beyond the United States, adoption patterns reflected regional needs. In Latin America and parts of Africa, dollar-pegged tokens continued to serve as a hedge against currency volatility and capital controls, with peer-to-peer transfers and payroll payments contributing to volume growth. In Asia, exchanges and market makers relied on stablecoins for rapid arbitrage and funding, particularly during periods of market volatility. The combination broadened stablecoin usage beyond speculative trading into everyday financial activity.

Infrastructure improvements also played a role. Layer-2 networks and alternative blockchains reduced transaction costs and congestion, making small-value transfers economical. Compliance tooling matured, enabling issuers and intermediaries to monitor flows without undermining user privacy. Together, these advances supported higher throughput while addressing concerns around illicit finance and systemic risk.

Despite the surge, questions remain about concentration and resilience. A handful of issuers account for the majority of volume, raising concerns about operational risk and governance. Critics argue that stablecoins still depend heavily on the traditional banking system for reserves and redemption, creating potential chokepoints during stress. Supporters counter that transparency requirements and diversified custody arrangements mitigate these risks more effectively than in earlier cycles.

The competitive landscape is also shifting. New entrants backed by banks and payment networks are preparing launches aimed at wholesale settlement and programmable payments. Central banks are watching closely, weighing how privately issued tokens interact with domestic payment systems and prospective central bank digital currencies. Industry executives say coexistence is likely, with stablecoins handling global dollar flows while public systems focus on domestic use.