Stablecoins, a fast-growing type of cryptocurrency, are in focus thanks to both
new legislation
that is making progress in the U.S. Senate and Circle Internet Group Inc.’s
well-received debut
as a public company last week.
They are also getting increasing attention because of their quickly growing size. The current supply of stablecoins, which are crypto tokens whose values are pegged to another asset, is now equal to just under 10% of U.S. currency in circulation, according to a report by crypto exchange Coinbase Global Inc. on Tuesday.
The amount of currency in circulation in the U.S. stood at $2.4 trillion as of April, according to the Federal Reserve Bank of St. Louis. Meanwhile, the total stablecoin supply was $247 billion as of the end of May 2025, up almost 54% from the previous year, according to data from DefiLlama.
A stablecoin often has its value pegged to a currency, mostly commonly the U.S. dollar or a commodity, like gold U.S. dollar-linked stablecoin issuers often
hold a reserve
consisting of cash, short-dated U.S. Treasurys and overnight U.S. Treasury repurchase agreements, among others assets, to maintain the coin’s peg to the U.S. dollar.
To be clear, stablecoin holdings are not counted as currency in circulation, which consists solely of physical cash, such as coins and paper money held by the public (other than those held by banks and the Federal Reserve). But the Coinbase researchers argued it was interesting to compare the stablecoins to currency in circulation, given the scope for using the instruments as an alternative to cash and other payment methods.
Crypto bulls have long touted stablecoins’ ability to potentially serve as a competitor to credit cards, bank transfers and mobile payments, due to faster settlement and lower fees, especially for cross-border transactions. However, critics have also pointed to the growing use of stablecoins in
money laundering
, drug trafficking and
ransomware activities
.
Regardless, the use case for stablecoins remains primarily in crypto trading for now, according to a recent note by AllianceBernstein.
Roughly 88% of stablecoin transaction value in 2024 was generated via pairings with another crypto in trading, the note said. A trading pair refers to two different cryptocurrencies that can be traded against each other on an exchange. Stablecoins are the most common crypto to be paired with in trading, as they offer price stability, easy entry and exit, as well as high liquidity.
In comparison, only about 6% of stablecoin transaction value was generated through payments in 2024, noted the AllianceBernstein analysts.
Meanwhile, the Senate on Wednesday was poised to advance legislation that aims to regulate stablecoins — bringing it closer to final passage after revisions of the bill received support from several crypto-friendly Democratic senators. Should the bill become law, crypto bulls see potential for it to drive wider adoption of stablecoins.
Read:
New crypto bill could turbocharge the stablecoin industry: 4 changes it might bring
The legislation — called the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act — aims to provide a regulatory framework for stablecoins and their issuers. If enacted, it would be the first legislation in the U.S. regulating the $248 billion stablecoin market.
Meanwhile, stablecoin issuer Circle had an impressive start as a public company last week. Its stock was up 10.2% Wednesday afternoon to around $116.66 — almost four times its initial-public-offering price of $31 a share, according to Dow Jones Market Data.
