More than $300 billion in stubcoins are currently present on the blockchain as cheap issuance and clarity of regulations drives growth in the sector.
According to data from Defilama, total supply of Stablecoins exceeded $300 billion for the first time in early October, with a total market capitalization just over $300 billion.
The market has grown sharply over the past year, and the analytics platform shows that there are nearly 300 separate stubcoin projects in various chains, a sector that is much broader than the few issuers who dominated the previous cycle.
According to Defilama data, the influx of new entrants eroded the tether’s advantage.
Castle Island partner Nick Carter pointed out in a recent X post that “Stablecoin Duopoly is over,” adding that Fintech, exchanges and wallets would like to launch their own dollar-earned tokens to capture the yields held by incumbents.
“If it’s a $500 million crypto exchange on USDT deposits, Tether makes about $35 million a year from that float and you don’t get anything,” Carter pointed out.
The exchanged data from Defillama reflects this. At Binance, users have nearly $30 billion in USDT, followed by $7 billion in USDC. At Buybit, traders own around $5 billion in USDT and about $800 million in Ethena’s USDE Stablecoin.
Unlocked demand
Chiara Munaretto, managing partner of Stablecoin Insider, a media platform focused on Stablecoin, told Defiant that market growth was the result of “network effects of movement.”
“Regulatory green lights and successful use cases signal the market that Stablecoins is a functional working model. As more projects, payment rails and banks test stable integration, they test the idea that it is possible, legal and valuable.
Eneko Knorr, CEO and co-founder of Bitcoin-backed Stablecoin Stabolut, told Defiant that the main reason the Stablecoin market is growing so rapidly is that it “sense of confidence enough to allow large, traditional companies to ultimately get involved.”
“But the most important reason for this growth is that you understand how useful financial people are in the real world. Think about how slow and expensive it is to use banks to send money to other countries.
Speaking to Anurag Arjun, co-founder of Away, a modular blockchain-based layer, Risk Premium for moving through real-world liquidity on-chain said that the act of genius and clarity “helped remove the grey zones around issuance, payments, etc., and that Infra’s support collapsed as it matured.
“Yield and activity further amplifies the optics, but the actual engine here is this triple-challenge: legal certainty, interoperable payment rails, and configurable issuing tools. Together, they went from substantial equipment to substantial financial primitive. Demand did not grow.
A busy space
The clarity of regulations promoted by the Genius Act encourages new entrants by setting clear standards for both bank and non-bank issuers, making it easier for traditional institutions to explore stubcoins.
Policy development is consistent with rapid technological advances as waves of new Layer 1 networks, including circle arcs, paradigm assisted tempos, and Bitfinex-supported plasmas. These advances provide up to 12% cross-linked vessels to provide up to 12% traditional banks.