Stablecoin Industry Surges as USDC Hits $60 Billion Market Cap and Institutional Interest Grows

The stablecoin market continues its explosive growth, with Circle’s USDC hitting a record $60 billion market cap, surpassing its previous all-time high.

USDC recorded significant growth over the past three months, adding around $16 billion to its total market cap, according to CoinGecko data. In the same period, USDC outpaced its main competitor, Tether (USDT), which grew by $7 billion. Despite this, USDT still maintains 62% market dominance, per DeFiLlama.

Meanwhile, stablecoins are circulating over $208 billion, facilitating more than $4 trillion in transactions, according to a new report by Keyrock and Centrifuge. This represents a 45% increase in circulation compared to the same time last year.

The Rise of Stablecoins

Since 2019, both stablecoin volume and transactions have grown consistently, with volume increasing by 58% and transactions rising by 35% over the last 12 months, according to Visa’s on-chain analytics.

Experts point to several key factors driving stablecoin growth, including the demand for secure digital assets that can easily move between traditional finance (TradFi) and decentralized finance (DeFi).

Another key driver of stablecoin growth is the introduction of clearer regulations by governments worldwide. In the US, regulators have proposed the Guiding and Establishing National Innovation for US Stablecoins Act, or GENIUS Act, which aims to establish a comprehensive regulatory framework for payment stablecoins. Earlier this month, the bill passed the Senate Banking Committee with a bipartisan 18-6 vote.

“Stablecoins have evolved from a crypto-native tool to a foundational piece of global financial infrastructure,” Bhaji Illuminati, CEO at Centrifuge, told The Defiant. “With larger institutions entering, we’ll see stablecoins move deeper into B2B payments, cross-border settlement, and internal efficiencies.”

The next phase isn’t just about replacing legacy rails, she explained, it’s about building new ones. “Institutions will demand higher transparency, better risk frameworks, and interoperability, which will drive innovation in how stablecoins are issued, collateralized, and regulated,” Illuminati said.

A Growing Space

Institutional interest in stablecoins is accelerating, with major financial firms exploring their own digital asset offerings.

A Fidelity spokesperson confirmed to The Defiant that the asset manager – which oversees over $15 trillion in assets under administration – is currently testing its own stablecoin.

“Fidelity Investments has a long history of innovation, and a dedicated team focused on digital assets and blockchain technology,” the spokesperson added. “We regularly scan and test new opportunities to meet our customers' evolving needs.”

This comes as World Liberty Financial Inc. (WLFI) on Tuesday announced plans to introduce USD1, a fully backed stablecoin aimed at institutional adoption.

Pegged 1:1 to the US dollar, USD1 will be backed by short-term US government treasuries, US dollar deposits, and other cash equivalents. The stablecoin will initially launch on Ethereum and Binance Smart Chain.

Illuminati told The Defiant that the crypto landscape can expect even more institutional players to enter the stablecoin race.

“What’s different now is that these stablecoins aren’t just about crypto trading pairs—they’re strategic infrastructure for how asset managers distribute products and manage liquidity,” she said. “We should expect every major bank, asset manager and financial institution to explore issuing their own, either directly or through partnerships.”

The main obstacle so far has been the lack of clear and proactive guidelines, Illuminati said. “Companies have been hesitant to innovate due to a regulatory environment defined more by enforcement than by established rules,” she said. “True regulatory clarity will provide the guardrails needed to build durable, compliant products that can scale sustainably.”

Illuminati noted that stablecoin legislation is finally advancing, calling it a critical step toward institutionalizing these assets. “This opens the door for more innovation and greater participation from institutional issuers and investors who have been waiting for the signal that the space is ready for prime time,” she added.