Stablecoin trading volume breaks the record of $33 trillion: How did USDC turn the tables to become the "Circulation King"?

Against the backdrop of an increasingly clear regulatory environment, the global stablecoin trading volume exploded by 2025. According to Artemis Analytics data, the total stablecoin trading volume for the year soared to $33 trillion, a 72% increase year-over-year. Among them, USDC issued by Circle dominated with $18.3 trillion in trading volume, surpassing the larger market cap Tether (USDT, $13.3 trillion).

This phenomenon highlights the market’s strong preference for compliant, highly liquid stablecoins following the introduction of clear regulations such as the “Genius Act,” and also marks a shift of stablecoins from mere safe-haven storage tools to core financial infrastructure supporting the global digital dollar liquidity.

Historic Breakthrough: The Driving Forces Behind $33 Trillion in Trading Volume

2025 was undoubtedly a landmark year for the stablecoin market. The total trading volume of $33 trillion not only represents an astonishing figure but also signifies over a 70% growth compared to the previous year. This milestone breakthrough is not due to a single factor but results from a combination of policy tailwinds, market evolution, and geopolitical demand. On a macro level, the pro-cryptocurrency stance of former President Donald Trump and the promotion of the “Genius Act” during his administration provided unprecedented policy certainty and legitimacy for the US and global stablecoin markets, greatly boosting traditional financial institutions’ confidence to participate.

Structural changes in the market are also significant. Artemis co-founder Anthony Yim pointed out that despite the substantial increase in total volume, the share of transactions occurring on decentralized platforms has declined. This seemingly contradictory data reveals the “mainstreaming” process of stablecoin applications: they are increasingly used in broader commercial payments, cross-border settlements, and value storage scenarios, rather than being limited to speculation and trading within the native crypto space. Yim further analyzed, “This indicates that digital dollars are being adopted on a large scale, especially in the context of increasingly unstable geopolitical landscapes. Citizens in countries troubled by inflation and turmoil tend to hold dollars, and stablecoins are the simplest way to achieve this.” Stablecoins, especially those pegged to the dollar, have become the core tool for global users to gain dollar exposure in the digital economy.

This growth momentum peaked in Q4 2025, with quarterly trading volume reaching a record $11 trillion, a significant jump from $8.8 trillion in Q3. The accelerating growth curve suggests that stablecoins as a payment medium and value transfer tool are rapidly expanding their network effects. Major corporations like Standard Chartered, Walmart, and Amazon exploring issuing or integrating stablecoins not only bring incremental capital and users to the market but also substantively validate the technology’s huge potential to improve financial efficiency.

USDC’s Comeback: Why Did Trading Volume Surpass “Big Brother” USDT?

One of the most striking findings is that, in terms of trading volume, the second-largest USDC has fully surpassed the “big brother” USDT. Currently, according to CoinGecko data, USDT maintains the top spot globally with a circulating market cap of about $187 billion, 2.5 times that of USDC (~$75 billion). However, Artemis data shows that in 2025, USDC handled $18.3 trillion in transactions, significantly higher than USDT’s $13.3 trillion. Behind this is the fundamentally different usage scenarios and user profiles of the two stablecoins.

USDC’s success is largely attributed to its dominant position in the decentralized finance (DeFi) ecosystem. DeFi platforms like Uniswap, Aave, Compound, etc., have built an automated lending and trading world based on smart contracts, where capital efficiency is pursued to the extreme. Anthony Yim explained, “DeFi traders frequently open and close positions, which means the same USDC dollar is reused many times.” This high-frequency, on-chain capital circulation contributes massive transaction volume to USDC. Due to its transparent reserve audits, close cooperation with US regulators, and deep liquidity across mainstream CEXs and DeFi protocols, USDC has become the preferred choice for security-conscious and composability-focused DeFi elite users.

In contrast, USDT plays a more “traditional” and “practical” role. It is often the first entry point for global users, especially in emerging markets, into the crypto world, and the preferred medium for daily P2P payments and commercial settlements. Due to its earlier issuance and wider penetration, USDT maintains strong user stickiness in many offline scenarios and specific regions. People tend to hold USDT in wallets as a store of value or make one-time payments when needed, rather than repeatedly circulating it through complex DeFi strategies. This “hold rather than turnover” characteristic results in a high market cap but relatively lower on-chain transaction frequency.

Circle’s Chief Strategy Officer Dante Disparte attributes USDC’s trading advantage to the “Genius Act” providing clear legal standards and the trust it has built. “People choose USDC because it offers the deepest liquidity and highest regulatory trust worldwide.” This statement directly points to the core: in an era of increasingly strict compliance requirements, transparency and regulatory friendliness have become essential for institutional funds and large-scale trading, and this is precisely the moat USDC is building.

USDC vs USDT 2025 Key Data Comparison

• Total annual trading volume: USDC at $18.3 trillion; USDT at $13.3 trillion.
• Circulating market cap: USDT approximately $187 billion; USDC approximately $75 billion.
• Dominant scenarios: USDC dominates DeFi high-frequency trading and capital flow; USDT dominates daily payments, cross-border remittances, and value storage.
• Quarterly peak: In Q4 2025, both contributed to a stablecoin quarterly trading volume of $11 trillion.
• Growth drivers: USDC’s growth benefits from regulatory clarity and institutional adoption; USDT’s growth is rooted in broad global user base and payment networks.

“Genius Act” and Geopolitical Turmoil: Dual Forces Shaping a New Landscape

The US “Genius Act,” passed in July 2025, marks a watershed moment in stablecoin development. It establishes a federal registration and regulatory framework for stablecoin issuers, clarifying standards for reserve asset quality, custody, and audits. This legislation acts as a strong boost, fundamentally changing the game rules. It means compliant stablecoins (like USDC) are no longer in legal gray areas but are officially recognized as legitimate financial instruments. This certainty has attracted traditional financial institutions and tech giants that previously hesitated to enter.

The impact of the law was immediate. It not only solidified the advantages of compliant stablecoins like USDC but also spurred new market entrants. For example, the crypto enterprise World Liberty Financial related to the Trump family launched its own stablecoin USD1 in March 2026, aiming to carve out a share under clear rules. The policy signals that the US intends to maintain its dollar dominance in the digital currency era, with compliant stablecoins serving as its key digital extension.

On the other hand, geopolitical and economic instability continue to provide sustained demand for stablecoins. In countries and regions suffering from runaway inflation, sharp currency fluctuations, or strict capital controls, residents have an almost instinctive desire for dollar assets. However, traditional dollar bank accounts or cash are often difficult to access. Stablecoins, especially USDT which can be easily obtained and transferred via P2P networks, offer an efficient, low-threshold alternative. This “digital dollarization” trend is especially prominent in Latin America, Africa, and parts of Asia, forming a solid and large demand base for stablecoins. The two forces—top-down active regulation and bottom-up passive hedging demand—jointly push stablecoins onto today’s mainstream financial stage.

Future Outlook: The Path to $56 Trillion and Potential Challenges

Based on current rapid momentum, Bloomberg Industry Research predicts that by 2030, the total global stablecoin payment flow could reach $56 trillion. This outlook depicts a future where stablecoins are deeply integrated into the global financial fabric. Growth will unfold along several clear paths: first, accelerating penetration from native crypto ecosystems into traditional commercial payments, such as supply chain finance, payroll, and B2B settlements; second, in a landscape where CBDCs and private stablecoins coexist, the latter may play a larger role in cross-border scenarios; third, as more compliant stablecoins denominated in euros, yen, etc., emerge, the market will become more diversified.

However, the journey to $56 trillion will not be smooth. The IMF issued warnings in October 2025 worth considering. The IMF believes that the vast stablecoin market could threaten traditional banking’s credit creation function, as funds may flow from bank deposits into stablecoins; it could weaken the effectiveness of monetary policy; and in extreme cases, trigger runs on traditional safe assets. These concerns highlight the systemic risks that the “disruptive” nature of stablecoins might pose to the existing financial system.

Moreover, market competition will intensify. Besides the USDC and USDT duopoly, potential competitors from traditional finance giants (like JPM Coin from JPMorgan) and big tech companies (such as Meta’s former Diem project) cannot be underestimated. Regulatory arbitrage, smart contract vulnerabilities, reserve asset security, and transparency will continue to test market participants. For investors and users, choosing stablecoins should involve not only liquidity and usability but also the credibility of the issuer, reserve composition, and regulatory compliance. The future winner will be the one that is not only technologically advanced but also safest and most trustworthy.

In-Depth Explanation: What Are Stablecoins? — Definitions, Types, and Mechanisms

To understand this multi-trillion-dollar market transformation, it’s essential to clarify the basic concepts. What are stablecoins? Simply put, they are cryptocurrencies designed to maintain price stability, usually by pegging to one or a basket of mainstream assets (such as USD, EUR, gold). Their core goal is to solve the price volatility issues of traditional cryptocurrencies like Bitcoin and Ethereum, making them suitable for daily transactions, a unit of account, and storage of value—“digital cash.”

Based on their backing mechanisms, stablecoins are mainly divided into three types: 1. Fiat-collateralized: Currently the most common form, such as USDT, USDC. Issuers hold equivalent or over-collateralized fiat currency (like USD) and highly liquid assets (like short-term government bonds) as reserves, supporting each circulating token. Their stability depends on the issuer’s redemption ability and reserve transparency. 2. Crypto-overcollateralized: Represented by MakerDAO’s DAI. These stablecoins maintain a peg to USD by locking over-collateralized other cryptocurrencies (like ETH) via smart contracts. They are more decentralized but mechanically complex. 3. Algorithmic stablecoins: Attempt to maintain stability solely through algorithms and smart contracts that adjust supply based on demand. Historically, these have faced significant challenges and have a tiny market share.

In operation, USDC, for example, works as follows: users deposit $1 with Circle, which then mints and issues 1 USDC to the user; when users burn 1 USDC, Circle redeems $1. Its reserve assets are held by regulated financial institutions and undergo regular audits by reputable accounting firms, with public reports. This “issue-redeem-audit” cycle is the foundation of market trust. Understanding these principles helps us see beyond the surface of trading volume and grasp the fundamental differences in security, decentralization, and applicable scenarios among stablecoins.

Background Overview: The Origins of the “Genius Act” and Its Global Ripple Effects

The “Genius Act” (The Genius Act) did not emerge overnight; it is the result of years of debate and compromise within US legislative bodies on how to regulate cryptocurrencies, especially payment stablecoins. After the 2024 elections, the new political landscape accelerated its passage. Its core goal is clear: to encourage innovation while bringing stablecoins into the federal regulatory framework, protecting consumers, preventing illegal financial activities, and ensuring the long-term competitiveness of the dollar.

Key provisions include: requiring all stablecoin issuers targeting US users to obtain federal (bank license or new specialized license) approval; reserves must be high-quality liquid assets like cash and short-term US Treasuries, with strict segregation; issuers must provide regular public reserve attestations audited by independent firms; and responsibilities between state and federal regulators are clarified. The law’s passage provides a clear compliance path for companies like Circle and effectively removes barriers for others like Paxos and Gemini.

The influence of the “Genius Act” quickly extended beyond the US, creating significant global ripple effects. First, it set a regulatory benchmark that prompted the EU (which has already passed MiCA), the UK, Singapore, and other jurisdictions to accelerate or adjust their stablecoin rules, sparking an international competition for digital asset regulation standards. Second, it boosted global confidence in compliant dollar stablecoins, potentially leading funds to shift from less regulated stablecoins to USDC, as shown by the 2025 trading data. Lastly, it may also motivate other sovereign nations to accelerate the development of their own CBDCs or support domestic compliant stablecoins to counter the potential monetary sovereignty challenges posed by the digital dollar. In essence, the “Genius Act” not only reshapes the US market but also resets the global race in digital currencies.