STABLECOINS | Stablecoin Supply Growth Flatlines as Regulation Costs and Treasury Yields Bite

2026-01-23 06:09:13

After a long phase of rapid expansion, the global stablecoin market has stopped growing and entered a consolidation phase.

Industry sources say this plateau (around ~310 billion) reflects higher compliance costs from tighter rules in the U.S and EU and the fact that U.S Treasury yields are more attractive than holding non-yielding stablecoins.

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Key points

• Issuance slowing: Institutional stablecoin issuers now face tougher regulatory requirements like stricter reserve standards under the US GENIUS Act and the EU’s Markets in Crypto-Assets regime which has raised compliance costs and discouraged aggressive minting.

• Treasury yields matter: With real yields on U.S government debt trading higher, the opportunity cost of holding stablecoins that don’t pay direct interest has risen, reducing speculative demand.

STABLECOINS | Circulation of Stablecoins Doubled in the Past 18 Months, Says McKinsey

• Market size staying steady: Data show the total stablecoin supply has hovered around ~$310 billion since late 2025 after more than doubling during early 2024–2025.

MILESTONE | Stablecoins Cross $300 Billion in Market Cap for the First Time

• Macro stress and market behavior: The plateau comes after a sharp market sell-off in October 2025 that triggered widespread deleveraging, shrinking demand for on-chain liquidity.

MILESTONE | Crypto Markets Record the Largest Single-Day Liquidation Event in History

• Yield debate heats up: Banking groups are pushing to curb or ban yield-bearing stablecoins in upcoming U.S legislation (CLARITY Act), arguing they could compete with traditional deposits, a claim industry leaders like Circle’s CEO have strongly rejected.

CLARITY ACT | U.S Senate Banking Committee Unveils Draft Crypto Market Structure Bill With Proposed Amendments

Stablecoins may now be viewed less as high-growth instruments and more as foundational infrastructure for payments and settlement. The market’s next expansion phase could hinge on clearer regulations and products that offer yield without triggering regulatory pushback.

2025 RECAP | Stablecoins Surged by ~50% in 2025 – The Biggest Year on Record

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