Key Points:

• The total stablecoin supply has exceeded $221 billion, making up over 1% of the U.S. dollar M2 money supply.
• Tether’s market dominance has dropped, while Circle’s USDC has gained traction, especially on Solana.
• New players like Ethena’s USDe and Usual’s USD0 are emerging as competition in the stablecoin space intensifies.

Stablecoins Now a Significant Part of the U.S. Money Supply Stablecoins, once a niche digital asset, have now surpassed a major milestone, accounting for over 1% of the U.S. dollar M2 money supply. According to analysts at OurNetwork, the total stablecoin market has surged past $221 billion, adding nearly $100 billion since 2024. This signals increasing adoption and integration of stablecoins in the broader financial ecosystem.

Tether’s Market Share Declines as USDC Gains Ground The stablecoin market is undergoing a shift, with Tether (USDT) seeing a decline in its dominance. Once commanding a 73% market share, Tether now holds 64%, while Circle’s USDC has grown from 20% to 25%. Together, USDT and USDC still account for 89% of the total stablecoin market, but newer entrants are beginning to make their mark.

Emerging players such as Ethena’s USDe and Usual’s USD0 have shown significant growth. USDe has added $5.9 billion in supply, while USD0 has grown by $1.1 billion. On the other hand, FDUSD, which initially gained traction through promotions, has seen a decline in market share as incentives faded and competition grew.

USDC’s Surge on Solana and Layer-2 Networks A major factor in USDC’s growth has been its expansion beyond Ethereum’s mainnet. Analysts note that Solana has experienced an “explosive growth” in USDC adoption, with more than $7.7 billion worth of USDC circulating on the network, likely driven by a boom in meme coin trading activity. Additionally, USDC has seen increasing use on Ethereum’s layer-2 solutions, including Coinbase’s Base and Arbitrum.

Regulatory Push: Circle Advocates for Stablecoin Oversight Circle’s CEO, Jeremy Allaire, has been vocal about the need for stricter regulation of dollar-pegged stablecoins within the U.S. He has called for stablecoin issuers to be required to register in the country, arguing that there “shouldn’t be a free pass.” This stance could make it more challenging for rival Tether to expand in the U.S., especially after relocating its headquarters to El Salvador.

As stablecoins continue to grow and reshape the financial landscape, the battle for dominance and regulatory clarity is set to intensify in the coming years.