New Landscape of the Stablecoin Market: From Anchored Assets to Value Accumulation Hub

Introduction

Stablecoins have become a key component connecting traditional finance and the crypto ecosystem, with their strategic importance continuously increasing. From the early centralized custody models to the current stablecoins issued autonomously by protocols, driven by on-chain synthesis and algorithmic mechanisms, the market structure has fundamentally changed.

At the same time, the demand for stablecoins is rapidly expanding due to DeFi, the on-chain of physical assets, liquidity staking derivatives, and layer two networks, promoting the formation of a new pattern of coexistence, competition, and cooperation among various models.

This is no longer a simple issue of market segmentation, but a deep competition regarding the "future form of digital currency" and "on-chain settlement standards". This report focuses on the main trends and structural characteristics of the current stablecoin market, systematically sorting out the operational mechanisms, market performance, on-chain activity, and policy environment of mainstream projects, in order to help understand the evolution trends of stablecoins and the future competitive landscape.

Stablecoin Market Trends

Total Market Value and Growth Trend of Global Stablecoins

As of May 26, 2025, the total market value of global stablecoins has reached approximately $246.38 billion, an increase of about 4927.64% compared to approximately $5 billion in 2019, showing an explosive growth trend. This trend not only highlights the rapid expansion of stablecoins within the cryptocurrency ecosystem but also emphasizes their increasingly irreplaceable position in areas such as payments, trading, and decentralized finance.

In 2025, the stablecoin market continues to maintain rapid growth, with a 78.02% increase compared to the market value of 138.4 billion USD in 2023, currently accounting for 7.04% of the total cryptocurrency market value, further consolidating its core market position.

2019-2022: The market value of stablecoins surged from 5 billion to 167.9 billion, growing 32 times, primarily driven by the explosion of the DeFi ecosystem, increased demand for cross-border payments, and market risk aversion.

2023: Market cap fell by 17.57%, mainly due to the collapse of TerraUSD and tightening global crypto regulations.

2024-2025: Market capitalization rebounds strongly, growing by 78.02%, reflecting an increase in institutional participation and the continued expansion of DeFi applications.

Recent Growth Drivers

Macroeconomic financial environment:

Against the backdrop of increasing global inflationary pressures and turbulence in financial markets, the demand for "on-chain cash" has risen significantly among investors. The U.S. Treasury has defined stablecoins as "on-chain cash", providing a policy rationale for attracting traditional capital. At the same time, stablecoins are also seen as a safe haven during severe fluctuations in crypto assets.

Technological advancements and cost advantages:

Some efficient public chains represented by Tron have significantly reduced transaction costs, with USDT transfers on the Tron chain having almost zero fees, attracting a large number of trading users. High-throughput blockchains like Solana have also accelerated the expansion of stablecoin use cases due to their high speed and low fee characteristics.

Institution adopts enhancement:

In 2024, BlackRock will issue a tokenized fund settled in USDC, aimed at exploring the on-chain potential of assets such as bonds and real estate, highlighting the importance of stablecoins in institutional-level settlements. According to OKG Research, in an optimistic scenario where global compliance frameworks gradually unfold and both institutions and individuals widely adopt stablecoins, the global supply of stablecoins is expected to reach $3 trillion by 2030, with monthly on-chain transaction volumes hitting $9 trillion and annual transaction totals potentially exceeding $100 trillion. This means that stablecoins will not only stand shoulder to shoulder with traditional electronic payment systems but will also occupy a structurally foundational position in global clearing networks. In terms of market capitalization, stablecoins will become the "fourth category of fundamental monetary assets" following government bonds, cash, and bank deposits, serving as an important medium for digital payments and asset circulation.

DeFi demand pull:

Some studies indicate that stablecoins are the "main entrance" to DeFi, and their low volatility characteristics make them the preferred choice for value storage and trading. Data shows that stablecoins account for more than two-thirds of on-chain trading volume and are widely used in scenarios such as lending, DEX liquidity provision, and mining. In 2024, the TVL of leading DeFi protocols is expected to grow by about 30%, with USDC and DAI as the main trading pairs. After the 2024 U.S. elections, the market value of stablecoins increased by $25 billion, further validating their core role in DeFi scenarios.

Stablecoin Market Structure and Competitive Landscape

Market Concentration and Overall Landscape

Currently, the stablecoin market is highly concentrated, with Tether's market value reaching $150.335 billion, accounting for 61.27%; USD Coin's market value is $60.822 billion, accounting for 24.79%. The combined market share of the two reaches 86.06%, forming a dual oligopoly.

Nevertheless, emerging stablecoins are gradually rising, challenging the dominant position. For example, the USDE launched by Ethena Labs grew from $146 million at the beginning of 2024 to $4.889 billion, an increase of over 334 times, making it the fastest-growing stablecoin. In addition, USD1 and USD0 also show good market expansion trends, but in the short term, they are still insufficient to shake the dominance of USDT and USDC.

Competitive Landscape Analysis

Market competition mainly takes place among three types of stablecoins:

Fiat-collateralized stablecoins: USDT and USDC are backed by US dollar reserves, enjoying advantages in centralized exchanges and traditional finance due to transparency and compliance. For example, USDT added a market value of 30 billion USD in 2024, demonstrating its market trust.

Decentralized stablecoin: USDE, through the synthetic dollar mechanism and native yield model, is set to become a popular trading pair in 2024, with its locked-up amount increasing by 50%, rapidly rising in the DeFi ecosystem; while DAI relies on decentralized governance to attract DeFi users, it is smaller in scale, only 3.631 billion dollars.

Emerging stablecoins: USD1 quickly expanded to $2.133 billion through institutional endorsement; USD0 attracted users with DeFi incentive mechanisms, reaching a market capitalization of $641 million.

Other: The collapse of TerraUSD in 2022 led to a trust crisis in algorithmic stablecoins, prompting the market to shift towards more transparent fiat-backed stablecoins, resulting in USDC's market share increasing by approximately 10% between 2023 and 2024.

The Rise Logic of USDE

USDE is a synthetic dollar stablecoin based on Ethereum, developed by Ethena Labs, which uses staked Ethereum as collateral and employs a delta-neutral hedging strategy to maintain its peg to the US dollar. Its rapid growth can be attributed to the following factors:

Innovative yield mechanism

USDE provides high returns for holders through the "Internet Bond" feature, sourced from the staking rewards of stETH and the funding rate spread of perpetual contracts. This high-yield model has attracted a large number of DeFi users and institutional investors, especially in a low interest rate environment where traditional financial products struggle to offer similar returns.

Deep integration of the DeFi ecosystem

The widespread support of USDE on DeFi platforms makes it one of the preferred stablecoins for DeFi users. Users can easily trade, provide liquidity, or participate in lending without worrying about price fluctuations. Data shows that the locked-up amount of USDE on certain platforms has increased by 50%, reflecting its important position in the DeFi ecosystem.

decentralized and censorship-resistant features

As a stablecoin fully based on crypto assets, USDE does not rely on the traditional financial system, which has significant appeal among users pursuing decentralization, especially in regions where traditional financial services are limited or restricted.

The growth of market demand

As the DeFi and cryptocurrency ecosystem expands, the demand for stablecoins continues to grow. USDE, as an innovative and fully decentralized stablecoin, meets the market's demand for new stablecoin solutions.

Institutional support and cooperation

The cooperation between Ethena Labs and well-known crypto investment institutions and exchanges has enhanced the market confidence and liquidity of USDE.

Marketing and Community Engagement

Ethena Labs quickly attracted the attention of users and developers through effective marketing strategies and community incentive programs, promoting the adoption of USDE.

Challenges of Emerging Stablecoins

USD1: Issued by World Liberty Financial, USD1 has a market capitalization of $2.133 billion, ranking 7th. Its market cap skyrocketed from $128 million to $2.133 billion in just one week, showing rapid growth.

WLFI is associated with the Trump family and has secured a $200 million investment from certain institutions, enhancing institutional backing. Reports indicate that USD1 has been chosen as the settlement currency for significant transactions, such as government cooperation projects in Pakistan, further boosting its market influence.

USD1 is rapidly expanding through exclusive agreements and institutional adoption, but its political background may pose regulatory risks.

USD0: A USD0 issued by a certain platform, with a market value of 641 million USD, ranked 12th. The platform states that it attracts users through a token incentive mechanism, allowing holders to participate in governance and share in the platform's profits.

USD0 combines the low volatility of stablecoins with the yield potential of DeFi, attracting users who focus on decentralized innovation.

The unique positioning of USD0 in the DeFi ecosystem brings it growth potential, but it needs to enhance market awareness and liquidity.

Emerging stablecoins are challenging the market through differentiated strategies, but it is difficult to shake the dominant positions of USDT and USDC in the short term.

Mainstream Stablecoin Analysis and Comparison

This section systematically analyzes and compares the top five mainstream stablecoins by market capitalization from the dimensions of mechanism structure, asset support type, liquidity and application scenarios, risk points, etc.

Liquidity and Trading Pair Distribution

The liquidity of mainstream stablecoins such as USDT and USDC is extremely ample, with deep trading pairs available on the vast majority of mainstream exchanges and decentralized trading platforms. They almost cover all major public chains: USDT/USDC can be traded on chains like Ethereum, Tron, Solana, BSC, and Polygon; while emerging stablecoins initially launch mainly on specific public chains and certain centralized exchanges. Recently, the Tron network introduced zero fees for USDT, further boosting the trading volume and liquidity of USDT on that chain. Overall, USDT and USDC are the most globally liquid stablecoins, whereas the liquidity of other stablecoins is concentrated in specific ecosystems and exchanges.

Reserve Transparency

Reserve transparency is a key factor in assessing the credibility of stablecoins. The following is a detailed analysis of the reserve transparency of various stablecoins:

USDT:

Reserves: Claimed to be backed by cash, bank deposits, short-term government bonds, and other assets.

Transparency: Quarterly reserve reports are published, but they have long been questioned. Some reports indicate that the reserve structure is complex, and some assets are difficult to verify. For example, in 2023, it was pointed out that commercial papers were included in the reserves, raising market concerns.

Risk: Historically, there have been multiple regulatory investigations due to issues with reserve transparency.

USDC:

Reserves: Supported by cash and short-term U.S. Treasury securities, reserve assets are held in regulated financial institutions.

Transparency: Monthly audited reserve reports are published, with high transparency and strong market trust. For example, the May 2025 report shows total reserves exceeding $60 billion, all in cash and government bonds.

Risk: Dependence on traditional financial systems, affected by macroeconomic conditions and regulatory policies.

USDE:

Reserve status: Synthetic US Dollar, backed by stETH as collateral, and maintaining value through a delta-neutral hedging strategy of DeFi protocols.

Transparency: Completely based on blockchain, reserves and mechanisms are transparent, and users can verify on the DeFi platform. For example, in May 2025, the collateral assets of USDE were publicly available on-chain, showing a stETH collateral rate of over 150%.

Risk: Dependence on the stability of the DeFi ecosystem; market volatility may affect its value.

DAI:

Reserve situation: backed by multiple crypto assets as collateral, supporting decentralized governance, the current collateral ratio typically remains above 150%.

Transparency: All collateral assets