Tether Sheds $5.5 Billion in USDT Supply as Stablecoin Turnover Hits a Record Pace
The total stablecoin market cap has fallen about 4.3% from its May peak of $322.41 billion to $308.5 billion, marking the largest monthly decline since the collapse of Terra in May 2022. June alone saw a $7.7 billion drop. Yet adjusted transaction volume reached a record $1.83 trillion in June, 60% higher than May and more than double the level a year earlier.
Tether’s USDT supply declined from $189.54 billion on May 1 to roughly $184 billion by July 29, a decrease of about $5.5 billion. Circle’s USDC fell from $77.27 billion to $72.41 billion over the same period.
The divergence between shrinking supply and rising volume suggests a fundamental shift in stablecoin usage: fewer dollars sit idle, while the remaining supply moves faster through payments, trading, and settlement systems.
Much of the idle capital appears to have moved into tokenized Treasury products, which offer returns unavailable on payment stablecoins. That sector has expanded to over $16 billion, up from about $11 billion in March, according to rwa.xyz. The GENIUS Act, signed in July 2025, prevents issuers from paying interest directly on payment stablecoins, encouraging treasurers to keep savings in tokenized funds and hold stablecoins only for payments.
Stablecoin turnover now runs at about six times per month, roughly twice the rate seen two years ago, according to a March 2026 note by Standard Chartered. Visa data indicates that each stablecoin dollar moves far more frequently than a dollar held in a conventional US bank account.
USDC has emerged as the leading settlement asset despite a smaller supply than USDT. It processed about $1.21 trillion of adjusted volume in June, compared with $576 billion for USDT.
Not all blockchain transfers represent economic activity. Automated activity, exchange transfers, and wash trading can inflate raw figures. McKinsey and Artemis estimated that identifiable real-world payments accounted for about $390 billion in 2025, with business-to-business transactions at $226 billion and payroll and remittances at roughly $90 billion.
The payments share remains small but has expanded sharply over two years, suggesting stablecoins are evolving from parked collateral into active financial infrastructure. The Bank for International Settlements has warned that U.S. dollar-pegged stablecoins are breaking capital controls and accelerating dollarization, a pattern central banks have watched for decades.