The total supply of stablecoins has declined for the first time in years, but this decrease may not indicate as much about demand as it seems.
The overall market capitalization has fallen by approximately 4.3% from its May peak of $322.41 billion to $308.5 billion. In June alone, the drop amounted to $7.7 billion—the most significant monthly decline since the Terra crash in May 2022.
At the same time, the adjusted transaction volume for stablecoins reached a record $1.83 trillion in June. This is 60% higher than May's figure and more than double the level recorded a year ago.
This discrepancy points to a change in the nature of stablecoin usage. Fewer dollars are sitting idle, while the remaining supply is moving faster through payment, trading, and settlement systems.
Idle Balances Move to Yield-Bearing Assets
The supply of $USDT by Tether decreased from $189.54 billion as of May 1 to approximately $184 billion as of July 29. Over the same period, the supply of $USDC by Circle dropped from $77.27 billion to $72.41 billion. This reduction remains moderate compared to the market's 26% crash in 2022.
Apparently, some capital has flowed into tokenized Treasury products, which offer yields not available for payment stablecoins. According to rwa.xyz, the volume of this sector has grown to over $16 billion compared to roughly $11 billion in March.
The GENIUS Act, signed in July 2025, prohibits issuers from paying interest directly on payment stablecoins. This structure encourages treasurers to keep savings in tokenized funds, holding stablecoins only when payments need to be made.
Turnover Velocity Replaces Market Cap as Key Metric
According to a Standard Chartered report from March 2026, stablecoin turnover is now about six times per month. This is roughly double the rate from two years ago. Visa data also shows that each dollar in a stablecoin moves much more frequently than a dollar stored in an ordinary U.S. bank account.
$USDC has become the leading settlement asset, despite its supply being smaller than that of $USDT. In June, it processed about $1.21 trillion in adjusted volume, compared to $576 billion for $USDT.
However, not all blockchain transfers represent real economic payments. Automated activity, exchange transfers, and wash trades can inflate the raw figures.
According to a Forbes report, estimates by McKinsey and Artemis suggest that identifiable real-world payments accounted for about $390 billion in 2025. Business-to-business transactions made up $226 billion, while payroll and remittance payments were approximately $90 billion.
The share of payments is still small but has grown sharply over two years.
Stablecoin market capitalization still matters, as issuers earn interest on reserves. However, for networks, processors, and financial platforms, transaction frequency may become a more valuable metric. June data indicates that stablecoins are transforming from 'frozen' collateral into active financial infrastructure.
